-=AT&T(T) to merge WarnerMedia with Discovery (DISCA)

 

AT&T's WarnerMedia and Discovery (DISCA) creating standalone company by combining operations to form new global leader in entertainment

Under the terms of the agreement, which is structured as an all-stock, Reverse Morris Trust transaction, AT&T would receive $43 billion (subject to adjustment) in a combination of cash, debt securities, and WarnerMedia's retention of certain debt, and AT&T's shareholders would receive stock representing 71% of the new company; Discovery shareholders would own 29% of the new company. The Boards of Directors of both AT&T and Discovery have approved the transaction.

The companies expect the transaction will create substantial value for AT&T and Discovery shareholders by: Bringing together the strongest leadership teams, content creators, and high-quality series and film libraries in the media business. Accelerating both companies' plans for leading direct-to-consumer (DTC) streaming services for global consumers. Uniting complementary and diverse content strengths with broad appeal - WarnerMedia's robust studios and portfolio of iconic scripted entertainment, animation, news and sports with Discovery's global leadership in unscripted and international entertainment and sports. Forming a new company that will have significant scale and investment resources with projected 2023 Revenue of approximately $52 billion, adjusted EBITDA of approximately $14 billion, and an industry leading Free Cash Flow conversion rate of approximately 60%. Creating at least $3 billion in expected cost synergies annually for the new company to increase its investment in content and digital innovation, and to scale its global DTC business.