NEW YORK (AFP) - AT&T on Saturday (Oct 22) announced a US$85 billion (S$118 billion) deal to buy Time Warner that would create a powerhouse with control over a vast array of media and entertainment assets and the means to deliver them.

The deal values Time Warner - with HBO, CNN and Warner Bros studios - at a total of US$108.7 billion as it calls for AT&T to absorb the media group's debt.

It would give the big US telecom firm "the world's best premium content with the networks to deliver it to every screen, however customers want it," a statement from the companies said.

"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 AT&T chairman and chief executive Randall Stephenson.

The tie-up positions AT&T as a strong rival to Comcast, which owns NBCUniversal, and aims to counter the growing threat from online rivals such as Netflix and Amazon.

But the deal is likely to face tough scrutiny from antitrust regulators, and Republican presidential nominee Donald Trump said he would block it if elected.

AT&T is the second-largest US wireless carrier and third-largest cable TV provider in the United States, while Time Warner controls a valuable stable of entertainment content suppliers, including Warner Bros. film and TV studios, the HBO television production group, cable news giant CNN, and the TNT and TBS cable channels.

The deal comes amid challenges facing media companies from the decline of conventional cable television as consumers increasingly turn to streaming on mobile technology.

AT&T had US$147 billion in revenues in 2015 while Time Warner reported $28 billion.

AT&T has pursued an aggressive expansion, paying almost $50 billion to buy satellite television provider DirectTV in 2015.