AT&T broadcasts deal to merge WarnerMedia with Discovery


U.S. telecom large AT&T introduced Monday a deal combining its content material unit WarnerMedia with Discovery, paving the way in which for one in every of Hollywood’s greatest studios to compete with rivals like media giants Netflix and Disney.

Underneath the settlement, AT&T mentioned it will obtain an combination quantity of $43 billion in a mix of money, debt and WarnerMedia’s retention of sure debt. AT&T shareholders would obtain inventory representing 71% of the brand new firm, whereas Discovery shareholders would personal 29%, it added.

If accepted by regulators, the deal successfully reverses AT&T’s years-long plan to mix content material and distribution in a vertically built-in firm.

The deal would create a brand new enterprise, separate from AT&T, that could possibly be valued at as a lot as $150 billion, together with debt, in response to The Monetary Instances.

Shares of U.S. media firm Discovery had been 27% increased in premarket buying and selling, whereas AT&T’s inventory value was up greater than 4%.

“This settlement unites two leisure leaders with complementary content material strengths and positions the brand new firm to be one of many main world direct-to-consumer streaming platforms,” AT&T CEO John Stankey mentioned in a press release.

“AT&T shareholders will retain their stake in our main communications firm that comes with a gorgeous dividend. Plus, they’ll get a stake within the new firm, a worldwide media chief that may construct one of many high streaming platforms on this planet.”

Management and governance

AT&T mentioned Discovery President and CEO David Zaslav would lead the brand new firm. The board would include 13 members, seven initially appointed by AT&T together with the chair, and Discovery would appoint six members, together with Zaslav.

“It’s tremendous thrilling to mix such historic manufacturers, world class journalism and iconic franchises below one roof and unlock a lot worth and alternative,” Zaslav mentioned, including that AT&T and Discovery’s property “are higher and extra precious collectively.”

The brand new agency’s singular mission, Zaslav mentioned, is “to deal with telling probably the most wonderful tales and have a ton of enjoyable doing it.”

Discovery Communications President and CEO David Zaslav and HBO Chairman and CEO Richard Plepler communicate onstage throughout “Who Owns Your Display?” on the Self-importance Honest New Institution Summit at Yerba Buena Heart for the Arts on October 9, 2014 in San Francisco, California.

Michael Kovac | Getty Photos

AT&T owns CNN, HBO and Warner Bros. after it acquired Time Warner, since renamed to WarnerMedia, for $109 billion in 2018. Discovery’s channels embody Animal Planet and the Discovery Channel.

HBO and HBO Max reportedly have round 64 million subscribers worldwide. Discovery mentioned final month it had reached 15 million paying subscribers.

Against this, Netflix has round 208 million world subscribers, whereas Disney+ not too long ago surpassed 100 million lower than 1½ years after the streaming service launched.

The announcement got here after experiences over the weekend that the businesses had been in superior talks to finish the merger.

— CNBC’s Alex Sherman contributed to this report.



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