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AT&T Inc will merge its media giant WarnerMedia with TV company Discovery Inc in a $43-billion deal, the companies have announced.
WarnerMedia’s premium entertainment, sports and news assets will be combined with Discovery's non-fiction and international entertainment and sports businesses to create a premier, standalone global entertainment company which is yet to be named.
As part of the all-stock deal, AT&T would receive $43 billion (subject to adjustment) in a combination of cash, debt securities, and WarnerMedia’s retention of certain debt, and AT&T’s shareholders would receive stock representing 71 per cent of the new company. Discovery shareholders would own 29 per cent of the new company. The Boards of Directors of both AT&T and Discovery have approved the transaction, the companies said in an official release.
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One global portfolio
The new content company will house nearly 2,00,000 hours of programming and will bring together over 100 of some of the most known brands under one global portfolio, including HBO, Warner Bros.Discovery, DC Comics, CNN, Cartoon Network, HGTV, Food Network, the Turner Networks, TNT, TBS, Eurosport, Magnolia, TLC, Animal Planet, ID, etc.
The new company will also be able to increase investment and capabilities in original content and programming.
Discovery forays into OTT space with Discovery Plus
The new company’s Board of Directors will consist of 13 members, seven initially appointed by AT&T, including the chairperson of the board. Discovery will initially appoint six members, including David Zaslav.
Discovery President and CEO David Zaslav will lead the proposed new company with a management team and top operational and creative leadership from both companies.
Taking on Netflix
The deal gives a major push to AT&T in the media industry which had faced various regulatory hindrances to finally complete the acquisition of WarnerMedia in 2018 for $85.4 billion.
This new media major will take on major competitors in the space, such as Netflix.
“With a library of cherished IP, dynamite management teams and global expertise in every market in the world, we believe everyone wins...consumers with more diverse choices, talent and storytellers with more resources and compelling pathways to larger audiences, and shareholders with a globally scaled growth company committed to a strong balance sheet that is better positioned to compete with the world’s largest streamers,” said Zaslav.
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