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AT&T Inc. and Discovery, Inc. have joined forces in creating a premier, standalone global entertainment company. This combines WarnerMedia’s premium entertainment, sports, and news assets with Discovery's leading non-fiction and international entertainment.

Jason Stankey, CEO of AT&T, 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. It will support the fantastic growth and international launch of HBO Max with Discovery’s global footprint and create efficiencies that can be reinvested in producing more great content to give consumers what they want.”

A new player for global streaming

The new proposed company to be led by Discovery President and CEO David Zaslav will compete globally in the fast-growing direct-to-consumer (DTC) business. Viewers can gain access to a combination of WarnerMedia’s storied content library of popular and valuable IP with Discovery’s global footprint, a trove of local-specific content and deep regional expertise across more than 200 countries.

By and large, the new company will be able to invest in more original content for its streaming services. Not to mention enhancing the programming options across its global broadcast channels and offering more innovative video experiences to consumers around the world.

Commenting about the recent merger, David 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.  With a library of cherished IP, dynamite management teams, and global expertise in every market in the world, we believe everyone wins...consumers with more diverse choices, talent and storytellers with more resources and compelling pathways to larger audiences, and shareholders with a globally scaled growth company committed to a strong balance sheet that is better positioned to compete with the world’s largest streamers.”

The newly augmented company will own one of the largest content libraries in the world, with nearly 200,000 hours of iconic programming under its wing. Under one global portfolio, over 100 of the most cherished, popular, and trusted brands in the world such as HBO, Warner Bros., Discovery, DC Comics, CNN, Cartoon Network, HGTV, Food Network, Magnolia, TLC, and Animal Planet can be accessed.

Under the terms of the agreement, structured as an all-stock, Reverse Morris Trust transaction, AT&T would receive approximately $43 billion wherein AT&T and Discovery shareholders would receive 71% and 29% of the new company’s stock, respectively.

The transaction is anticipated to close in mid-2022 upon finalizing approvals and customary closing conditions.

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