Published on 11 Apr 2022 on Zacks via Yahoo Finance
AT&T (T), Discovery Close Deal to Create Warner Bros. Discovery
AT&T Inc. T and Discovery, Inc. have closed the deal to combine the WarnerMedia business with Discovery.The combination creates a global media and entertainment giant, Warner Bros. Discovery, Inc., which will trade on the Nasdaq under the symbol “WBD”, beginning Apr 11.Warner Bros. Discovery will create and distribute the world’s most differentiated and complete portfolio of content, brands and franchises across television, film and streaming.The new company combines WarnerMedia’s entertainment, sports and news assets with Discovery’s non-fiction and international entertainment and sports businesses.This marks a significant milestone not only for Warner Bros. Discovery but also for its shareholders, distributors, advertisers and particularly consumers. The company intends to bring more choices to consumers worldwide while advancing creativity.With the close of this deal, AT&T plans to invest at record levels in its growth areas of 5G and fiber. The company expects to strengthen its balance sheet and reduce debt while continuing to pay an attractive dividend.The combination of the two companies will strengthen WarnerMedia’s industry-leading position in media and streaming.Per the deal, at close AT&T received $40.4 billion in cash and WarnerMedia’s retention of certain debt. AT&T’s shareholders also received 0.241917 shares of WBD for each share of AT&T they held at close. Thus, AT&T’s shareholders received 1.7 billion shares of WBD, which represents 71% of WBD shares.Discovery’s existing shareholders own the remainder of the new company. In addition to their new shares of WBD, AT&T’s shareholders continue to hold the same number of shares of AT&T they held immediately prior to close.AT&T continues to invest in key areas of business and adapt to the evolving market scenario for long-term growth.The stock has lost 19.4% in the past year compared with the industry’s decline of 9.5%.
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