Update 10/23/2016: AT&T has made the deal official, with Time Warner selling for $85.4 billion, or $107.50 per share.
The deal could be formally announced as early as tonight.
That price, to be paid in a mix of cash and stock, pushes the deal into the ranks of the largest acquisitions of all time, and dwarfs the roughly $30 billion valuation attached to NBC Universal when Comcast acquired a controlling interest in 2011.
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Those two deals are part of a broad trend of cable companies and wireless providers acquiring media producers. Time Warner’s holdings include HBO, Hulu, and Warner Bros. Entertainment, which in turn includes DC Comics to several video game studios.
The logic behind such deals (including, in its own small way, Verizon-Yahoo!) is that being a data service provider is no longer a fast-growing or high-margin business. Cellular mobile data, a major part of AT&T’s portfolio, is in the middle of a fierce price war led by second-tier carriers T-Mobile and Sprint. That’s driven in part by the fact that mobile data infrastructure has been thoroughly built out across the U.S., so that (to echo Sprint’s line) carriers are now mostly competing on price, not service. Meanwhile, smartphones and their data plans have reached a saturation point among consumers.
The same can’t quite be said for terrestrial internet service, since the rollout of fiber-optic and gigabit internet has stalled for perceived lack of broad demand. But large internet service providers (again, including AT&T) face another threat—there are growing signs that they could come to be regulated as public utilities, which could impact their bottom lines in various and unforeseeable ways.
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So adding content to their portfolios, with the resulting ad revenue, is appealing to data providers. But regulators might not be so upbeat, since the resulting vertically integrated company could be seen as monopolistic. Those concerns were prominent during the Comcast-NBC merger, and the Journal reports that a length regulatory review of this deal is likely, and not expected to close until late 2017.
Note: Fortune’s parent company Time, Inc. is no longer part of Time Warner.