AT&T signs agreement to merge media business with Discovery
AT&T will merge its massive media business including CNN, HBO, TNT and TBS with Discovery, the owner of lifestyle networks including Food Network and HGTV, in a US$43 billion deal.
Faced with the disconnection and intrusion of streaming media services, major broadcast media companies have laid off employees and seek strength through mergers.
The deal announced on Monday will create an independent media company as families increasingly abandon cable and satellite TV in favor of Netflix, Amazon Prime Video, Facebook, TikTok and YouTube.
In an all-stock transaction, AT&T will receive $43 billion in cash, debt securities, and certain debt held by WarnerMedia. AT&T shareholders will receive 71% of the shares representing the new company, and Discovery shareholders will own 29% of the new company.
AT&T entered the streaming media field through HBO Max, which is a direct competitor of Netflix, Apple, Disney and Comcast. Discovery launched an independent streaming service this year called Discovery Plus.
The abandonment of the media business marks a major shift for AT&T. AT&T strives to complete a deal in 2018 to acquire Time Warner for $85.4 billion. The US Justice Department is trying to prevent it for anti-competitive reasons. transaction.
The transaction is expected to be completed in the middle of next year.