The US Telecommunication giant announced a deal through which it intends to merge two units, paving the way for one of Hollywood’s biggest studios
AT&T revealed that its content unit – WarnerMedia – will be merged with Discovery, and a studio that can compete with the likes of Netflix and Disney will be created. Under the agreement, AT&T will receive $43 billion in a combination of cash, debt and WarnerMedia’s retention of a particular debt. AT&T shareholders will receive stocks worth 71% of the new company, while Discovery’s will own 29%.
“AT&T shareholders will retain their stake in our leading communications company that comes with an attractive dividend. Plus, they will get a stake in the new company, a global media leader that can build one of the top streaming platforms in the world,” stated John Stankey, AT&T CEO.
According to The Financial Times, the deal is expected to create a business separate from AT&T that could reach a value of $150 billion, including debt.
After the announcement, AT&T stock price was up roughly 5%, while Discovery’s were up 14% in pre-market.
Sources: cnbc.com, ft.com