Wireless carrier AT&T Inc will acquire Time Warner in a $85.4-billion (Rs 5.7 lakh crore approximately) deal, Reuters reported. The wireless carrier will pay $107.50 (Rs 7,193 approximately) per share, evenly split between cash and stock. The companies will close the deal by the end of 2017, after the US Department of Justice reviews it.

While Time Warner Chief Executive Jeff Bewkes will stay with the company for a short period to help with the transition, AT&T Chief Executive Randall Stephenson will head the new company. Stephenson said, “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.”

The companies said they would introduce an online video package similar to a traditional pay television package to attract subscribers. “It will disrupt the traditional entertainment model and push the boundaries on mobile content availability for the benefit of customers,” the companies told The Wall Street Journal.

Stephenson said the entertainment giant had created an “amazing franchise” by distributing its content to many distributors, and “we don’t imagine that changing”. The Time Warner conglomerate comprises CNN, TNT, the prized HBO channel and Warner Bros. film and TV studio. Time Warner CEO Bewkes said,“He [Stephenson] came to talk to me about his view of distribution going forward, and my view of content...Conceptually it might make sense for us to combine. Should we investigate?’ ”

Shares of Time Warner soared 4.6% and ended 8% higher on Friday after reports about the acquisition surfaced. At one point during trading, its stocks broke a 15-year high. AT&T shares, however, dropped 3% in the regular session and 1% in after-hour trading.