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AT&T’s WarnerMedia, Discovery to Merge in Blockbuster Deal (3)

May 17, 2021, 4:30 PM

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.

The transaction values the combined entity at about $130 billion including debt, based on WarnerMedia’s estimated enterprise value of more than $90 billion.

The CEOs of AT&T and Discovery talk about combining media assets to create a new entertainment company.
Source: Bloomberg)

AT&T will receive $43 billion in cash, debt securities and debt retention, with its shareholders getting stock representing 71% of the new company, the companies said in a statement Monday. The deal is structured as a tax-friendly Reverse Morris Trust.

The ...