AT&T Inc and Discovery have closed their transaction to combine the telco’s WarnerMedia business with Discovery. The combination creates ‘a premier standalone global media and entertainment company’, which will be called Warner Bros. Discovery Inc; the enlarged company will begin trading on the NASDAQ stock exchange today (11 April) under the ‘WBD’ ticker symbol.
Under terms of the agreement – which was structured as a Reverse Morris Trust transaction – at close AT&T received USD40.4 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.
John Stankey, CEO of AT&T, commented: ‘With the close of this transaction, we expect to invest at record levels in our growth areas of 5G and fibre, where we have strong momentum, while we work to become America’s best broadband company. At the same time, we’ll sharpen our focus on returns to shareholders.’