AT&T to merge WarnerMedia with Discovery in purported $43 billion mega media deal

Turning the streaming TV race all the more competitive, the United States Telecom Giant  AT&T (T) unveiled a deal combining its content unit WarnerMedia with Discovery, paving way for one of Hollywood's biggest studios to compete with the likes of rival media giants-Netflix and Disney. Speculations related to this major development, which were rife for a while now, were put to rest when the companies came forward to announce the same. 

Terms of Agreement between AT&T and Discovery for WarnerMedia spin-off

As per the said agreement, AT&T would receive $43 billion (subject to adjustment) in a combination of cash, debt securities, and WarnerMedia's retention of certain debt. Moreover, AT&T's shareholders would get the majority of the shares in the combined company, at 71%, while Discovery's shareholders would get 29%. As far as leadership and governance are concerned, 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. 

"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," AT&T CEO John Stankey said in a statement. "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, " he added. 

While Zaslav talking about the agreement said, "It is super exciting to combine such historic brands, world-class journalism, and iconic franchises under one roof and unlock so much value and opportunity." He further added, "At&T and Discovery assets are more valuable together," and went on to talk about the new firm's singular mission, which as per him, is to focus on telling the most amazing stories and have a tom of fun doing."

It is pertinent to note CNN, HBO, and Warner Bros lie under the ownership of AT&T while Discovery owns the Discovery Channel and Animal Planet. While Warner Media-owned HBO and HBO Max, as per reports, have over 64 million subscribers worldwide, Discovery has 15 million paying subscribers. 

(Credit-AP/@ATT/@Discovery/Twitter)