May 18, 2021
AT&T is merging its WarnerMedia assets, including HBOMax, with Discover in a $43 billion stock deal that will allow the company to focus on its 5G and telecommunications businesses.
AT&T previously bought Time Warner three years ago for $85 billion, merging distribution and content under one roof.
A&T is making a 180-degree turn and is refocusing on 5G and the heavy investment required to do so.
The move reflects AT&T’s broader war with rivals Verizon and T-Mobile for 5G dominance, where T-Mobile appears to be gaining the upper hand after a strong first quarter.
Under the terms of the agreement, AT&T shareholders would hold 71% of the shares in the merger of WarnerMedia and Discover, while Discovery shareholders would hold 29%.
Discovery’s CEO, David Zaslav, will lead the merged companies, which will combine their streaming assets under the leadership of HBOMax and Discover+.
AT&T hopes the merger would accelerate streaming plans, as the combined company will have revenue of $52 billion and adjusted EBITDA of about $14 million by 2023.
The merger could also save AT&T $3 billion in costs to continue financing its content and streaming expansion.
It also aims to reduce the telecoms giant’s debt, while allowing AT&T shareholders a stake in the media business.
The combination of WarnerMedia and Discovery includes properties such as HBO, Warner Bros., Discovery, DC Comics, CNN, Cartoon Network, HGTV, Food Network, the Turner Networks, TNT, TBS, Eurosport, Magnolia, TLC, Animal Planet, and ID.
For more information, read the original story in Zdnet.
