A recent US court ruling green-lighting the merger between AT&T (NYSE:T) and Time Warner (NYSE:TWX) marked an historic event that some say could open the door to more merger-and-acquisition (M&A) activity ahead. Sara Araghi, CFA, vice president, research analyst, Franklin Equity Group, and Marc Kremer, CFA, research analyst, Franklin Templeton Fixed Income Group, discuss some of the possible implications.
Here are some highlights of the views of speakers represented in the podcast:
- Sara Araghi: There's a lot of speculation there will be more media deals in the future. And while new in the United States, internationally, we've had convergence happening for a while. I think we should think about concentration within industries. What does that mean in terms of the health of an industry when you actually have more M&A?
- Marc Kremer: It does seem like the favorable AT&T-Time Warner ruling opens the door for more M&A activity and consolidation. I think that some companies certainly seem ready to use the benefits of recent US tax reform as well, such as repatriation of foreign cash, to bolster the business positions when they can.
- Sara Araghi: I believe that all of the convergence that is happening, whether its content and distribution or even wireless and wireline convergence, is a function of the rise of the internet companies.
- Marc Kremer: When somebody who has been in an industry a long time decides to sell or merge their company, that perhaps means that the industry really is undergoing some different pressures.
The full transcript of the podcast follows:
