AT&T and Discovery Inc. have unveiled plans to merge their assorted media and entertainment assets.
The resulting deal will bring together WarnerMedia and its assets like Warner Bros. Pictures, HBO, DC Comics, CNN, Cartoon Network, TBS, TNT, etc. together with Discovery’s assets like Discovery Channel, HGTV, Food Network, Eurosport, TLC, Animal Planet, Travel Channel and OWN.
The merger aims to create a “global leader in entertainment” and “a stronger competitor in global streaming.” Both companies have their own streaming services right now – HBO Max and Discovery+ – and going by the language of the press release it seems they will remain separate for now.
In a joint press release, they say:
“The transaction will combine WarnerMedia’s storied content library of popular and valuable IP with Discovery’s global footprint, a 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.”
The merger will happen through a complex all-stock transaction (dubbed a ‘Reverse Morris Trust’) which will see AT&T receive $43 billion in cash, debt securities, and WarnerMedia’s retention of certain debt.
Discovery CEO David Zaslav will lead the merged company as CEO – so it’s not clear what will happen to current WarnerMedia CEO Jason Kilar. The companies say the deal will close in 2022, subject to shareholder and regulatory approvals.
The combined company is expected to generate $52 billion in revenue in 2023. It also allows the offering of one of the deepest content libraries in the world with nearly 200,000 hours of iconic programming combined with over 100 known brands.
This marks the latest mega-media merger following the reunification of Viacom and CBS in late 2019 (leading to the launch of Paramount+), and the Disney acquisition of Fox.