AT&T will combine WarnerMedia’s entertainment, sports and news assets with Discovery's entertainment and sports businesses to create a premier, standalone global entertainment company.
The deal provides AT&T with $43 billion (subject to adjustment) in a combination of cash, debt securities, and WarnerMedia’s retention of certain debt. AT&T’s shareholders will receive stock representing 71% of the new company. Discovery shareholders would own 29% of the new company.
AT&T said the transaction provides an opportunity to unlock value in its media assets, allowing the company to better capitalize on the longer-term demand for connectivity:.
AT&T's John Stankey states: “This agreement unites two entertainment leaders with complementary content strengths and positions the new company to be one of the leading global direct-to-consumer streaming platforms. It will support the fantastic growth and international launch of HBO Max with Discovery’s global footprint and create efficiencies which can be re-invested in producing more great content to give consumers what they want. For AT&T shareholders, this is an opportunity to unlock value and be one of the best capitalized broadband companies, focused on investing in 5G and fiber to meet substantial, long-term demand for connectivity. AT&T shareholders will retain their stake in our leading communications company that comes with an attractive dividend. Plus, they will get a stake in the new company, a global media leader that can build one of the top streaming platforms in the world.”
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