Deal is Confirmed - AT&T to merge WarnerMedia with Discovery

AT&T (NYSE:T) and Discovery (NASDAQ: DISC A) formally announce a deal to combine WarnerMedia's  premium entertainment, sports and news assets with Discovery's leading nonfiction and international entertainment and sports businesses in a new standalone  company. Under the terms of the agreement, AT&T would receive $43B 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. Meanwhile, Discovery shareholders would own 29% of the new company. The boards of both AT&T and Discovery have approved the transaction. For AT&T and its shareholders, the transaction is said to provide an opportunity to unlock value in its media assets and to better position the media business to take advantage of the attractive DTC trends in the industry. The "pure play" content company will own one of the deepest libraries in the world with nearly 200K hours of  programming and will bring together over 100 of the most cherished, popular and trusted brands in the world under one global portfolio, including HBO, Warner Bros., Discovery, DC Comics, CNN, Cartoon Network, HGTV, Food Network, the Turner Networks, TNT, TBS, Eurosport, Magnolia, TLC, Animal Planet, ID and many more. The combination will be fired off through a Reverse Morris Trust, under which WarnerMedia will be spun or split off to AT&T's shareholders via dividend or through an exchange offer or a combination of both and simultaneously combined with Discovery. The transaction is expected to be tax-free to AT&T and AT&T's shareholders. After the closing, AT&T expects its remaining assets to produce annual revenue growth in the low single digits CAGR from 2022 to 2024. Source: https://www.cnbc.com/2021/05/17/att-to-combine-warnermedia-and-discovery-assets-to-create-a-new-standalone-company.html

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Deal is Confirmed - AT&T to merge WarnerMedia with Discovery

May 17, 2021

bullish

general Analysis

[1 min Read]

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  • AT&T (NYSE:T) and Discovery (NASDAQ: DISC A) formally announce a deal to combine WarnerMedia's premium entertainment, sports and news assets with Discovery's leading nonfiction and international entertainment and sports businesses in a new standalone company.
  • Under the terms of the agreement, AT&T would receive $43B 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. Meanwhile, Discovery shareholders would own 29% of the new company.
  • The boards of both AT&T and Discovery have approved the transaction.
  • For AT&T and its shareholders, the transaction is said to provide an opportunity to unlock value in its media assets and to better position the media business to take advantage of the attractive DTC trends in the industry.
  • The "pure play" content company will own one of the deepest libraries in the world with nearly 200K hours of programming and will bring together over 100 of the most cherished, popular and trusted brands in the world under one global portfolio, including HBO, Warner Bros., Discovery, DC Comics, CNN, Cartoon Network, HGTV, Food Network, the Turner Networks, TNT, TBS, Eurosport, Magnolia, TLC, Animal Planet, ID and many more.
  • The combination will be fired off through a Reverse Morris Trust, under which WarnerMedia will be spun or split off to AT&T's shareholders via dividend or through an exchange offer or a combination of both and simultaneously combined with Discovery. The transaction is expected to be tax-free to AT&T and AT&T's shareholders.
  • After the closing, AT&T expects its remaining assets to produce annual revenue growth in the low single digits CAGR from 2022 to 2024.

    Source: https://www.cnbc.com/2021/05/17/att-to-combine-warnermedia-and-discovery-assets-to-create-a-new-standalone-company.html
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T

AT&T Inc.

20.95

-0.04
-0.19%

Return

-35.02%
Change % Since Posting
-11.29
Change Since Posting
32.24
Price When Posted

Metrics

37.08
Target Price
8/ 10
Confidence
2-6 Months
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