AT&T announced Monday morning a “definitive agreement” with Discovery to combine media assets and “create a premier, standalone global entertainment company” if approved by regulators.
The new company would combine assets, including HBO Max and Discovery+, to better compete in the direct to consumer business. Along with combining current content, the new company would have resources to invest more in original content, according to a press release from AT&T. Discovery CEO Dave Zaslav will lead the new company.
“This agreement unites two entertainment leaders with complementary content strengths and positions the new company to be one of the leading global direct-to-consumer streaming platforms,” said AT&T CEO John Stankey. “It will support the fantastic growth and international launch of HBO Max with Discovery’s global footprint and create efficiencies which can be re-invested in producing more great content to give consumers what they want.”
If the deal is approved, AT&T would receive $43 billion in a combination of cash, debt securities and WarnerMedia’s retention of certain debt. AT&T shareholders would own 71% of the new company with Discovery shareholders taking 29%.
The release notes that AT&T and Discovery expect the deal to close in mid-2022. Approval is subject to Discovery shareholders as well as regulatory approval. The deal has been approved by the Boards of Directors of both AT&T and Discovery.