AT&T announced on Saturday that the telecommunications giant has entered into an agreement to purchase media company Time Warner for what’s estimated to be more than $85 billion ($107.50 per share). The transaction isn’t expected to close until the end of 2017 but has been approved unanimously by the board of directors of each company.

The deal — a mix of stock and cash — will bring AT&T a lineup of major media properties, such as HBO, Warner Bros., TNT, TBS, CNN, and Cartoon Network, as well as broadcast rights to the National Basketball Association, March Madness, Major League Baseball, and even digital properties like Hulu, Bleacher Report, CNN.com, and Fandango. This deal appears to be complementary to AT&T’s DirecTV play, a company that was acquired in a $45.8 billion deal two years ago.

AT&T chief executive Randall Stephenson will be the new head of the combined company, while Time Warner leader Jeff Bewkes will be leaving after an interim period, according to the Wall Street Journal.

Terms of the transaction

Here’s how the acquisition will break down: Time Warner shareholders will receive $107.50 per share, of which $53.75 will be in cash and $53.75 in AT&T stock. As it’s explained, the stock portion will be “subject to a collar — such as Time Warner shareholders will receive 1.437 AT&T shares if AT&T’s average stock price is below $37.411 at closing, and 1.3 AT&T shares if AT&T’s average stock price is above $41.349 at closing.”

The total transaction value is said to be $108.7 billion, and when the deal is closed, Time Warner shareholders will own between 14.4 percent and 15.7 percent of AT&T shares “on a fully diluted basis, based on the number of AT&T shares outstanding today.”

On Friday, AT&T’s stock closed down 3 percent at $37.49, while Time Warner’s was up 7.81 percent at $89.48.

AT&T said it expects $1 billion in annual run rate cost synergies for the three years following closure of the deal. The company warns that the deal is subject to review by the U.S. Department of Justice. Should there be any hiccups (hopefully none like Yahoo experienced), there are two possible scenarios. Some have reported that Time Warner would have to pay a $1.7 billion break-up fee if another company mustered the finances to outbid AT&T, but AT&T would pay just $500 million if the deal got blocked due to anti-trust regulations.

But even if AT&T expects smooth sailing, the New York Times posits that the deal may not go off without a hitch. When Comcast bought NBCUniversal, consumer groups and analysts expressed displeasure, arguing that it would reduce competition in the space, among other complaints. This deal could be even worse because it’s not just a television company buying another television company — it’s a telecommunications company buying a television company, with more at stake.

A new media empire

Reports surfaced that the two companies were discussing a possible deal earlier this month, but things heated up in just the past 24 hours. Analysts had predicted that the deal could be worth almost $100 billion, making it one of the largest in the industry.

This developement ends speculation about who would want to buy Time Warner — the media conglomerate had previously entertained, before rejecting, an $80 billion offer from 21st Century Fox in 2014, and some had believed that Apple was interested in buying the company. Time Warner was even left at the altar when Comcast backed out of its $45.2 billion merger last year, perhaps largely over fears of how the Federal Communications Commission (FCC) would deal with Net Neutrality and whether telecommunications companies would be reclassified under Title II.

AT&T’s acquisition will surely give it a massive library of content that the company can proliferate across the internet and TV distribution system that it has in place.

“Combining with AT&T dramatically accelerates our ability to deliver our great brands and premium content to consumers on a multi-platform basis and to capitalize on the tremendous opportunities created by the growing demand for video content. That’s been one of our most important strategic priorities, and we’re already making great progress — both in partnership with our distributors and on our own, by connecting directly with consumers,” explained Jeff Bewkes.

This could be a good deal for some — one that could certainly benefit Time Warner shareholders. But let’s not forget the last time Time Warner was acquired — by AOL in 2000. That move is now being widely panned and is considered one of the “most ill-advised corporate marriages on record.”

Time Warner is a much different entity now than it was when it was created in 1990. It was the parent company of not only Time Warner Cable, which is now owned by Charter Communications, but also Warner Books; Warner Music Group; AOL, which is owned by Verizon; and Time, Inc. AT&T is receiving the media properties.

However, as we’re in an era devoted to consuming content on our mobile devices instead of solely on our television screens, AT&T’s acquisition of Time Warner could prove important strategically. It’ll give the telecommunications company not only a healthy library of popular titles, shows, and series that can be broadcast across all devices, but perhaps a greater bargaining chip when it comes to other media events, such as live sports, news, and more.

With this move, AT&T is doing what it needs to in order to remain competitive — adding more capabilities and resources so it can better counteract what Comcast and Verizon have to offer. All three have picked up content providers in one form or another — look at Comcast’s purchase of NBCUniversal and Verizon’s acquisition of AOL and Yahoo. Much of the strategy centers around how to increase advertising and revenue. AT&T cited this as a customer benefit in its announcement, explaining that by controlling content, AT&T will be able to “innovate on new advertising options,” which, combined with its subscriptions, will help pay for content creation.

“Premium content always wins. It has been true on the big screen, the TV screen, and now it’s proving true on the mobile screen. We’ll have the world’s best premium content with the networks to deliver it to every screen. A big customer pain point is paying for content once but not being able to access it on any device, anywhere. Our goal is to solve that.  We intend to give customers unmatched choice, quality, value, and experiences that will define the future of media and communications,” Stephenson said in a statement.

AT&T and Time Warner will hold a press conference on Monday morning to discuss the deal and AT&T’s third-quarter earnings.