AT&T has announced that it will buy Time Warner for $85.4 billion.
The deal was agreed at a meeting of the two boards on October 22 but will still need to be approved by regulators.
Correspondents say it is the biggest deal in the world this year.
The deal reflects the desire of the telecoms company to acquire content to stream over its high-speed network and attract more online viewers.
If the deal is approved by regulators, AT&T would gain control of CNN and the HBO TV network, in addition to the Warner Bros film studio and other prized media assets.
AT&T chief executive Randall Stephenson said he did not anticipate any regulatory obstacles to the merger, saying any concerns could be overcome if concessions were made.
“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,” he said.
The deal is likely to be closely scrutinized by antitrust regulators, as AT&T is already the third largest cable TV provider in the US.
In a statement, AT&T said that aim of the deal is to give customers “unmatched choice, quality, value and experiences that will define the future of media and communications” and the new company will “lead the next wave of innovation in converging media and communications industry”.
Meanwhile, Donald Trump has said he will block the deal if he is elected.
“It’s too much concentration of power in the hands of too few,” the Republican nominee said on October 22, before the deal was confirmed.
AT&T will pay $107.50 for each Time Warner share, in a combination of cash and stock, worth $85.4 billion overall, according to a statement.
AT&T said it expected to close the deal to be completed by the end of 2017.
Other media company shares, including Discovery, AMC, Netflix and CBS, recently rose as investors speculated that a deal could spark a fresh wave of takeovers and mergers among media and technology companies.
AT&T, which has a market value of about $238 billion, has already made moves to turn itself into a media powerhouse, buying satellite TV provider DirecTV last year for $48.5 billion.
Time Warner CEO Jeff Bewkes has, however, resisted selling in the past. The company rejected an $80 billion offer from Twenty-First Century Fox Inc in 2014.
The deal gives AT&T access to a major producer of content as it seeks to diversify away from its core telecoms business. Rival Verizon is currently in negotiations to buy Yahoo and has already bought AOL, owner of Huffington Post.
Some analysts, however, question whether AT&T needs to mount a complete takeover of Time Warner.
