AT&T, Discovery combine media brands in $43 billion deal2021-05-17 16:09 by Daniela
Tags: AT&T, Discovery
AT&T announced on Monday that WarnerMedia and Discovery are merging to become a new company that will immediately become one of the largest U.S. media businesses.
WarnerMedia is AT&T's unit that oversees popular entertainment and news brands such as HBO, HBO Max, CNN, TBS, TNT and more. It was the product of AT&T's hard-won $85 billion takeover of Time Warner in 2018, at the time built on the premise that combining AT&T's distribution power as a telecom company with the programming assets of a media conglomerate would be stronger together. It was approved after alleviating regulators' concerns that the combined company could have too much power compared with competitors.
A spin-off will help AT&T prioritize its broadband business and pay down its huge debt load.
"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 Discovery President and CEO David Zaslav in a press release.
"AT&T would receive $43 billion (subject to adjustment) in a combination of cash, debt securities, and WarnerMedia's retention of certain debt," Monday's announcement said. Zaslav added the new media company will start with $55 billion in debt.
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