Photo taken on Oct. 25, 2016 shows the headquarters of AT&T located in Dallas, Texas of the United States. AT&T Inc. reached an agreement Saturday to buy Time Warner Inc. for 85.4 billion U.S. dollars with an aim to reshape the mobile company into a media giant. (Xinhua/Xu Xun)

NEW YORK, Oct. 28 (Xinhua) -- The acquisition of the year may have just surfaced. Telecom giant AT&T on Saturday reached a deal worth 85.4 billion U.S. dollars to buy Time Warner, the media titan behind HBO, CNN, and some of the world's most popular entertainment.

The move is both logical and eyebrow-raising. On the one hand, it is a classic marriage of content and distribution; on the other, it has drawn criticism from lawmakers and even the presidential candidates for fears that the mega merger would harm competition.

CONTENT PLUS DISTRIBUTION

"This is a perfect match of two companies with complementary strengths who can bring a fresh approach to how the media and communications industry works for customers, content creators, distributors and advertisers," said Randall Stephenson, AT&T chairman and CEO.

It comes at a time that consumers are provided with increasing choices of communication, leaving the telecom industry, especially telephone services, in a venerable position.

"One of the major sources of revenue of AT&T is wireless telephone service," said Li Shanquan, portfolio manager at Oppenheimer Funds. "Now, however, we have seen a surge of other choices like WeChat, and we can almost predict wireless telephone service would go down in the future."

Buying a content company then becomes a natural choice for AT&T when they are trying to expand their business spectrum. And Time Warner, who owns a whole range of TV channels like HBO, CNN, TNT and TBS, as well as Warner Bros, seems to be the perfect one to look after.

"Gone are the days when consumers just observe content over television screens, but now they are consuming content over mobile, over computers, and other devices," said Robert Salomon, associate professor of New York University's Stern School of Business.

His idea is echoed by Brendan Ahern, chief investment officer at New York's Krane Funds Advisors.

"Telecommunications has evolved into content delivery which AT&T has a limited capacity while media is increasingly concerned with monetizing one's content via delivery venues," he said.

"AT&T and Time Warner complement one another especially in light of AT&T's DirecTV acquisition while Time Warner has a robust media library in need to distribution pipes."

A VERTICAL MERGER SUBJECT TO CLOSER ANTI-TRUST SCRUTINY

The proposed AT&T-Time Warner deal is generally considered as a vertical integration, where AT&T is buying one of its suppliers. Normally, merges of this sort won't reduce competition as the two companies play different part. This case, however, has raised a lot of eyebrows since the day AT&T posted the announcement.

U.S. Senator Bernie Sanders called on the Justice Department Wednesday in a letter to block the merger. "This proposed merger is just the latest effort to shrink our media landscape, stifle competition and diversity of content, and provide consumers with less while charging them more," he said.

After the AT&T announcement, the two presidential candidates also made clear their attitude toward the deal.

Hillary Clinton says she will "closely" follow the deal as it comes under regulatory scrutiny in Washington. Donald Trump said he would block the deal if he were elected.

The worry is shared by people in the business.

"Time Warner is a sensitive company, because it owns a lot of media channels, and has a lot of content to deliver," said Li of Oppenheimer Funds. "So the worry now is that if a company owns content and distribution of this scale at the same time, it has the potential to lead public opinion in its favor."

Salomon of New York University agreed. "Ultimately the regulators are mostly concerned about the consumer and whether a particular deal will harm the consumer," he said. "Here, there is a chance that the consumers will have less choice."

DISTRIBUTION/CONTENT MERGERS GAIN MOMENTUM

There are precedents of distribution and content marriage in various forms in the past. In 2011, Comcast purchased media conglomerate NBC Universal. And there are also companies like Liberty Media that owns content and distribution.

Although the market generally tends to be conservative toward this deal, analysts believe mergers like this could become the trend in the communication industry.

"Mergers and acquisitions amongst media and telecommunications companies is gaining momentum as evidenced by Comcast's purchase of NBC Universal and Verizon's purchase of AOL and proposed Yahoo purchase," said Ahern of Krane Funds Advisors.

There are concerns as well, as some experts don't think it would be a good idea trying to put the two giants together.

"While you try to put together distribution with content, the content people don't really understand distribution people, the distribution people don't understand the content people," explained Salomon, who gives a 60-70 percent chance that the deal would get approved. "It takes very different skill sets to run the two companies."

The trend also gives government more concern as how to keep the market balanced if more cases like this occur.

"The real question the government will have to ask is that given all the changes we have observed in the media industry broadly, is this the one deal going to concentrate power to a certain extent that consumers will be harmed," said Salomon.