AT&T has announced plans to merge its WarnerMedia content unit, which includes HBO, TNT, CNN, and Warner Bros., with Discovery. It is said to pave the way for a new streaming giant to take on Netflix and Disney. The transaction has been approved by both the AT&T and Discovery boards and it is expected to close in mid-2022. Reportedly, AT&T intends to split off the assets it acquired when it bought Time Warner for $85 billion in 2018.
According to Business Insider, AT&T would receive $43 billion in cash, debt securities, and WarnerMedia’s retention of certain debt under the proposed deal. The company’s shareholders are said to receive stock equating to 71% of the new company, with Discovery shareholders owning the remainder. This deal paves the way for AT&T to create a new streaming giant. The new company is said to “compete globally” by bringing content to subscribers. This includes HBO Max and the recently launched Discovery+.
For context, AT&T owns HBO Max, which has some of the best online shows. Further Discovery owns lifestyle TV networks such as HGTV and TLC. Moreover, AT&T is divesting its media business, WarnerMedia, which is its subsidiary. All of this combined will have over 100 popular and trusted brands in one global portfolio. These include HBO, Warner Bros., Discovery, DC Comics, CNN, Cartoon Network, HGTV, Food Network, the Turner Networks, TNT, TBS, Eurosport, Magnolia, TLC, Animal Planet, ID, and many more.
“The new company will be able to invest in more original content for its streaming services, enhance the programming options across its global linear pay TV and broadcast channels, and offer more innovative video experiences and consumer choices,” said the press release.
As per the press release, AT&T also plans to invest in creating opportunities for under-represented storytellers and independent creators.