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Discovery, WarnerMedia Complete $43 Billion Merger

Discovery and WarnerMedia April 8 announced the completion of their $43 billion merger, a union that creates a streaming-focused media giant that brings together a leading Hollywood movie studio (Warner Bros. Pictures) with a top producer of documentary and other non-fiction programming.

Warner Bros. Discovery, as the new company is known, will be headed by Discovery CEO David Zaslov and other Discovery executives. It begins trading on the Nasdaq with the start of trading on April 11, under the new ticker symbol “WBD.”

The new company combines WarnerMedia’s premium entertainment, sports and news assets with Discovery’s leading non-fiction and international entertainment and sports businesses, including Discovery Channel, Discovery+, Warner Bros. Entertainment, CNN, CNN+, DC, Eurosport, HBO, HBO Max, HGTV, Food Network, Investigation Discovery, TLC, TNT, TBS, truTV, Travel Channel, MotorTrend, Animal Planet, Science Channel, New Line Cinema, Cartoon Network, Adult Swim, Turner Classic Movies and others.

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“With our collective assets and diversified business model, Warner Bros. Discovery offers the most differentiated and complete portfolio of content across film, television and streaming,” Zaslav said in a statement. “We are confident that we can bring more choice to consumers around the globe while fostering creativity and creating value for shareholders. I can’t wait for both teams to come together to make Warner Bros. Discovery the best place for impactful storytelling.”

AT&T CEO John Stankey said the sale for operational control of the former WarnerMedia company would help the telecom giant reduce its debt and enable it to focus on wireless technology, including 5G. AT&T retains majority ownership in the new company.

“We are at the dawn of a new era in connectivity,” Stankey said.

Under the agreement, which was structured as a Reverse Morris Trust transaction, at close AT&T received $40.4 billion in cash and WarnerMedia’s retention of certain debt. Additionally, shareholders of AT&T received 0.241917 shares of WBD for each share of AT&T common stock they held at close. As a result, AT&T shareholders received 1.7 billion shares of WBD, representing 71% of WBD shares on a fully diluted basis. Discovery’s existing shareholders own the remainder of the new company. In addition to their new shares of WBD common stock, AT&T shareholders continue to hold the same number of shares of AT&T common stock they held immediately prior to close.

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