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HISTORY OF A MEGAMERGER

The $8 billion deal Time Warner is attempting to hammer out to bring Ted Turner’s empire into the fold has roots that go back almost 20 years. Time Warner chairman Gerald Levin has long wanted Turner’s flagship CNN in his corporate fold. Indeed, going back to 1977, pre-the Time-Warner merger, when Levin was toiling at a nascent HBO he proposed an all-news channel to the powers that be at Time Inc., but his corporate masters nixed the plan.

A decade later, then-Time Inc. president Nick Nicholas and Levin, who had moved into the role of chief strategist, were looking for merger possibilities to accelerate the company’s entrance into electronic media and entertainment. In June of 1987, Nicholas spearheaded Time Inc.’s initial investment in Turner. Later that year, during a layover in Zurich on his return from an African safari, Nicholas came up with the idea of merging Time Inc. with Warner Communications and Turner, according to Connie Bruck’s biography of the late Time Warner chairman Steve Ross, “Master of the Game.” Levin became an ardent supporter of the concept and wrote in an internal memo that bringing the three entities together should be a long-term goal of Time Inc. Months later the duo began their dance with Ross from which Time Warner was born.

Post-merger, Levin and Nicholas clashed until Nicholas was forced out of the company in 1991, but his idea of melding the three companies into one survived.

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