AT&T is merging WarnerMedia with Discovery to create a new media giant

AT&T announced this morning it’s spinning off its media business WarnerMedia and merging it with TV company Discovery, creating a major new player in the media world to compete with firms like Netflix and Disney that are leading the charge in streaming content.

The deal will bring a lot of familiar names in the TV and film world under one roof. WarnerMedia owns HBO, CNN, Cartoon Network, TBS, TNT, and the Warner Bros. movie studio, responsible for such huge franchises as Harry Potter and Batman, while Discovery operates cable networks including HGTV, Animal Planet, Food Network, and TLC. Both companies also have their own streaming platforms: HBO Max and Discovery Plus.

The boards of both AT&T and Discovery have approved the deal, but it will still have to be signed off by regulators. The deal is an all-stock transaction, which will see AT&T receive $43 billion in a combination of cash, debt securities, and debt retention on the part of WarnerMedia. AT&T shareholders will receive stock worth 71 percent of the new company, while Discovery’s shareholders will own the remaining 29 percent.

Developing…