WarnerMedia-Discovery mergers to create the biggest streaming video company
WarnerMedia's anticipated merger with Discovery would create a new $150bn streaming giant. The new company would be public, with AT&T and Discovery shareholders owning its shares.
The world's largest media and telecommunications holding company AT&T may on Monday, May 17, announce a deal to merge WarnerMedia with Discovery. As a result of the merger a new company worth $150 billion will appear, CNBC reports citing sources familiar with the details of the deal.
According to the sources, the securities of the new company will be traded on the stock exchange, and it will be jointly owned by shareholders of AT&T and Discovery. The merger deal, CNBC's interlocutors said, would strengthen the new combined company's position against rivals in the streaming video market Netflix and Disney. The sources added that talks between the companies are still ongoing, with AT&T and Discovery declining to comment to CNBC. Discovery has a market capitalisation of $16bn and an enterprise value of $30bn. AT&T acquired Time Warner, renamed WarnerMedia, for $85bn in 2018.
The operator is ramping up film and TV production to attract subscribers to its HBO Max streaming service. It also needs cash to pay off debts. Bloomberg Intelligence senior telecoms analyst John Butler said a possible combination of AT&T media assets with Discovery's assets "could give Turner properties access to an international streaming platform while expanding the library of content available from HBO Max".
source: forbes.com