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The proposed deal would put together one of
Hollywood's most powerful studios, home to the Harry Potter and
Batman franchises, with Discovery's stable of unscripted home,
cooking and nature and science shows.
The deal also marks the unwinding of AT&T's $108.7 billion
acquisition of U.S. media conglomerate Time Warner in 2018, and
underscores its recognition that TV viewership has moved to
streaming, where scale is required to take on the likes of
Netflix Inc and Walt Disney Co.
Under the terms, AT&T would receive $43 billion in a combination
of cash, debt securities, and WarnerMedia's retention of certain
debt. AT&T's shareholders would receive stock representing 71%
of the new company, while Discovery shareholders would own 29%
of the new company.
With the acquisition of Time Warner, AT&T sought to create a
media and telecoms powerhouse combining content and
distribution.
Yet this proved a costly strategy as it simultaneously sought to
expand next generation wireless services, most recently
borrowing $14 billion to buy more wireless spectrum.
(Reporting by Kenneth Li in New York and Subrat Patnaik in
Bengaluru; Editing by Anil D'Silva)
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