NEW YORK, N.Y. — AT&T announced Monday that it plans to combine its media business with Discovery, Inc. to create a standalone entertainment company, one of the largest in the U.S.
AT&T’s WarnerMedia owns brands like CNN, HBO, TNT, and TBS, while Discovery owns HGTV, the Food Network, TLC, Animal Planet, and of course, the Discovery Channel. Together, the companies will offer the most differentiated content profile in the world, according to a press release announcing the merger.
Under the terms of the agreement, AT&T would receive about $43 billion in a combination of cash, debt securities, and WarnerMedia’s retention of certain debt. AT&T’s shareholders would receive stock representing 71% of the new company, whereas Discovery shareholders would own 29% of the new company.
The companies hope that by teaming up in this way, they’ll be able to better compete in the industry, which has seen consumers cut the cord in favor of streaming services.
The new company will compete in the streaming market with its HBO Max and Discovery+ content. The transaction will combine WarnerMedia’s content library with Discovery’s global footprint.
Discovery President and CEO David Zaslav will lead the proposed new company. The 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 Zaslav.
The transaction is anticipated to close in mid-2022, subject to approval by Discovery shareholders and customary closing conditions, including receipt of regulatory approvals. No vote is required by AT&T shareholders.
“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,” said AT&T CEO John Stankey in a statement.
"We will build a new chapter together with the creative and talented WarnerMedia team and these incredible assets built on a nearly 100-year legacy of the most wonderful storytelling in the world. That will be our singular mission: to focus on telling the most amazing stories and have a ton of fun doing it,” wrote Discovery, Inc. CEP David Zaslav in a statement.