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Discovery Says European Commission Approves WarnerMedia Acquisition

The European Commission has reportedly given regulatory approval to Discovery’s $43 billion minority stake acquisition of AT&T’s WarnerMedia unit, which includes Warner Bros., Turner and HBO. U.S. government antitrust approval is expected sometime in 2022.

AT&T agreed to give operational control of WarnerMedia to Discovery, whose CEO, David Zaslav, will run the proposed “Warner Bros. Discovery” media company.

“Approval from the European Commission is a key milestone toward completing our proposed transaction,” Zaslav said in a statement. “Today we move one important step closer to creating … a premier entertainment company that will be one of the world’s leading investors in premium content and one positioned to serve consumers with what we believe will be the most complete content offering under one roof.”

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AT&T, which spent $85 billion acquiring the former Time Warner, found itself with far too much corporate debt when including other acquisitions such as DirecTV for $49 billion in 2019. The telecom has slowly sold off minority stakes with operational control in order to reduce the debt.

As a result, Discovery shareholders will own 29% of the Warner Bros. Discovery, while AT&T shareholders will own 71%. Separately, the telecom received $7.1 billion from private equity firm TPG in exchange for 30% ownership, while also offloading $195 million in video debt to the newly created DirecTV Stream company. TPG has hired new management to run the pay-TV operator.

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