AT&T has announced that WarnerMedia and Discovery are uniting to become a new company.  This will be a definitive agreement to combine WarnerMedia’s premium entertainment, sports, and news assets with Discovery's nonfiction and international entertainment and sports businesses to create a premier, standalone global entertainment company. 

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. 

In its press release, AT&T said that The new company will compete globally in the fast-growing direct-to-consumer business -- bringing compelling content to DTC subscribers across its portfolio, including HBO Max and the recently launched discovery+.  

The transaction will combine WarnerMedia’s storied content library of popular and valuable IP with Discovery’s global footprint, trove of local-language content and deep regional expertise across more than 200 countries and territories.  The new company will be able to invest in more original content for its streaming services, enhance the programming options across its global linear pay TV and broadcast channels, and offer more innovative video experiences and consumer choices.

“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 which can be re-invested in producing more great content to give consumers what they want," said John Stankey, CEO, AT&T 

The companies announced that Discovery President and CEO David Zaslav will lead the proposed new company.

"We will build a new chapter together with the creative and talented WarnerMedia team and these incredible assets built on a nearly 100-year legacy of the most wonderful storytelling in the world.  That will be our singular mission: to focus on telling the most amazing stories and have a ton of fun doing it,” said Discovery President & CEO David Zaslav.  

The new company’s Board of Directors will consist of 13 members, 7 initially appointed by AT&T, including the chairperson of the board; Discovery will initially appoint 6 members, including CEO David Zaslav.