AT&T strikes blockbuster $43 billion deal with Discovery to form media giant
AT&T strikes blockbuster $43 billion deal with Discovery to form media giant
AT&T shareholders will receive stock representing 71% of the new company and Discovery stockholders will own 29% of the new company.
Golden Boy, the Spirit of Communication statue, is pictured in the new AT&T Discovery District in downtown Dallas, Tuesday, April 20, 2021. The statue, originally called Genius of Telegraphy, stood atop AT&T s headquarters in New York City decades ago.(Tom Fox / Staff Photographer)
6:36 AM on May 17, 2021 CDT
Dallas-based AT&T Inc. agreed to spin off its media operations in a deal with Discovery Inc. that will create a new entertainment company, merging assets ranging from CNN and HBO to HGTV and the Food Network.
Provided by Dow Jones
By Sebastian Pellejero and Nina Trentmann AT&T Corp. s stock and bond prices rose Monday after the telecommunications company and Discovery Inc. said they plan to combine their media assets into a new publicly traded company. AT&T s shares rose 1.9% after the announcement, which would spin off the company s WarnerMedia division, unwinding a big bet on entertainment just three years after it acquired the owner of Time Warner Inc. for about $81 billion. Bond prices rose, with analysts saying the deal would help reduce the $169 billion in net debt AT&T reported at the end of March. AT&T is the most-indebted nonfinancial U.S. company, according to FactSet data, raising worries for some about the conglomerate s financial flexibility.
AT&T to merge media with Discovery in $43B deal
The Associated Press
NEW YORK AT&T will combine its massive media operations that include CNN, HBO, TNT and TBS in a $43 billion deal with Discovery, the owner of lifestyle networks including the Food Network and HGTV.
It is a major directional shift for AT&T which squared off with the Justice Department less than three years ago in an antitrust fight when it wanted to acquire Time Warner Inc. for more than $80 billion. That was a fight that AT&T won.
It s not immediately clear what the new company would mean for customers, but it likely allow the bundling of streaming services. For example, Disney offers its viewers Disney+, Hulu and ESPN.
By Dave Sebastian Shares of Discovery Inc. and AT&T Inc. shot up Monday after the companies reached a deal to combine their media assets into a new publicly traded company. Discovery shares rose about 16% to $41.40 in premarket trading, while AT&T shares rose 4.7% to $33.77. AT&T would receive $43 billion in cash, debt securities and WarnerMedia s retention of certain debt under the all-stock deal, the companies said. AT&T shareholders would get stock representing 71% of the new entity, while Discovery shareholders would own the rest, the companies said. The deal would further consolidate a media business buffeted by cord-cutting and competition from streaming video. WarnerMedia owns cable channels such as HBO, CNN, TNT and TBS as well as the Warner Bros. television and film studio. Discovery has a portfolio that includes its namesake network and HGTV.