AT&T strikes deal merging WarnerMedia with Discovery

(Karachi) In a bid to compete with Hollywood's biggest media giants Netflix and Disney, US telecom giant AT&T has struck a deal merging its content unit WarnerMedia with Discovery, local media reported on Monday.

As per details, the merger would enable AT&T to become a global leader in the entertainment industry and global streaming. The deal would also create a new business, separate from AT&T, that could be valued at as much as $150 billion, including debt.

Under the deal, AT&T will receive $43 billion in a combination of cash, debt securities, and debt retention on the part of WarnerMedia. Similarly, AT&T shareholders will receive stock worth 71 percent of the new company, while Discovery’s shareholders will own the remaining 29 percent.

Commenting on the matter, AT&T CEO John Stankey said: “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.”

He added, “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.”

Meanwhile, it is reported that Discovery President and CEO David Zaslav would lead the new company. The Board of Directors would consist of 13 members, seven initially appointed by AT&T including the chair of the board, and Discovery would appoint six members, including Zaslav.