The telecommunications giant AT&T announced the union of its subsidiary, which owns CNN and HBO, with the Discovery group, to form an independent company that will compete with the streaming platforms Netflix and Disney +, among others.
AT&T will combine its massive media operations, which include CNN, HBO, TNT, and TBS, in a $ 43 billion deal with Discovery, which owns lifestyle networks like Food Network and HGTV.
Faced with the demise of cable service users and the interference of streaming services, major media companies have stepped back and sought to strengthen themselves through integration.
The deal, announced Monday, will create an independent media company as households increasingly move away from cable and satellite television.
Audiovisual media is threatened by Netflix, Amazon Prime Video, Facebook, TikTok, and YouTube.
The merger brings together Warnermedia's premium entertainment and sports and news products, including Discovery's leadership in international and non-fiction entertainment, as well as its sports business, the company said in a statement. To form an independent global entertainment company.
Under the agreement, AT&T will receive a combined $ 43 billion in cash, debt securities, and, in particular, debt securities through WarnerMedia. AT&T shareholders will receive 71% of the shares representing the new company, and Discovery shareholders will own 29%.
AT&T entered the streaming industry through HBO Max, a direct competitor to Netflix, Apple, Disney, and Comcast. This year Discovery launched an independent streaming service called Discovery +.
The new company will be able to invest more in the original streaming material. It will entertain nearly 200,000 hours of programming and bring together more than 100 brands under a global portfolio, including DC Comics, Cartoon Network, Eurosport, Magnolia, TLC, and Animal Planet.
The deal to sever its media business marks a significant shift from AT&T, which fought hard for a 2018 $85.4 billion deal to buy Time Warner in 2018, citing competition from the Justice Department. Is trying to block this agreement.
David Zaslav, president and CEO of Discovery, will lead the new company. The deal is supposed to end in the middle of next year. It still needs approval from Discovery shareholders. AT&T shareholders are not required to vote on the transaction.
Discovery President and CEO David Zaslav will lead the new company.