Discovery, AT&T Shares Rise on Merger Deal
By Dave Sebastian
Shares of Discovery Inc. and AT&T Inc. shot up Monday after
the companies reached a deal to combine their media assets into a
new publicly traded company.
Discovery shares rose about 16% to $41.40 in premarket trading,
while AT&T shares rose 4.7% to $33.77.
AT&T would receive $43 billion in cash, debt securities and
WarnerMedia's retention of certain debt under the all-stock deal,
the companies said. AT&T shareholders would get stock
representing 71% of the new entity, while Discovery shareholders
would own the rest, the companies said.
The deal would further consolidate a media business buffeted by
cord-cutting and competition from streaming video. WarnerMedia owns
cable channels such as HBO, CNN, TNT and TBS as well as the Warner
Bros. television and film studio. Discovery has a portfolio that
includes its namesake network and HGTV.
The tie-up is a surprising U-turn by AT&T, which placed a
massive bet on media with its 2018 acquisition of Time Warner Inc.
for around $81 billion. That deal made it the world's most indebted
Discovery President and Chief Executive David Zaslav would lead
the proposed new entity, the companies said. The new company's
board would have 13 members, seven initially appointed by AT&T,
including the chairman of the board, the companies said. Discovery
said it would initially appoint six members, including Mr.
The companies said they expect to close the transaction in
Write to Dave Sebastian at firstname.lastname@example.org
(END) Dow Jones Newswires
May 17, 2021 08:19 ET (12:19 GMT)
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