WARNERMEDIA AND DISCOVERY TO MERGE, FORMING MEDIA GIANT

Mon 17 May 2021:

US telecommunications giant AT&T announced Monday a merger between its WarnerMedia unit — which owns CNN and HBO — and Discovery media, creating a streaming giant that could compete with Netflix and Disney+.

AT&T will receive $43 billion worth of cash, debt securities and WarnerMedia’s retention of debt. The new company will be led by Discovery CEO David Zaslav.

It’s a major deal that allows AT&T to undo one of the largest media acquisitions in history: the 2016 purchase of Time Warner for $109 billion. AT&T billed the deal as a chance to combine its telecommunications business, consumer data and media offerings in a way that could compete with major media and tech companies.

The move to spin off Time Warner, later named WarnerMedia, and combine it with Discovery comes as Netflix and Disney have emerged as the dominant players in the direct-to-consumer streaming market.

The deal will “combine WarnerMedia’s premium entertainment, sports and news assets with Discovery’s leading nonfiction and international entertainment and sports businesses to create a premier, standalone global entertainment company,” a statement from the companies said.

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