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Thursday, March 30, 2023

USA – AT&T confirms split of WarnerMedia to merge with Discovery


The American operator AT&T has confirmed this Tuesday that it will carry out the separation of WarnerMedia, which groups the multinational’s media assets, to subsequently merge the business with Discovery in a transaction for which it will receive 43,000 million dollars (38,433 million euros ) in cash and other considerations.

In addition, the board of AT&T has approved the distribution of a post-closing dividend of $1.11 per share, which represents a ‘pay out’ ratio of 40 percent of effective free cash flow, in the lower part of forecasts between 40 percent and 43 percent.

According to the conditions established for the operation, which will be completed in the second quarter of 2022, AT&T shareholders will receive 0.24 shares of the new company for each title of the operator in their possession, which will mean that the current AT&T shareholders control 71 percent of Warner Bros Discovery, while current Discovery shareholders will own 29 percent.

“In evaluating how to distribute, we are guided by one goal: to execute the transaction as smoothly as possible to support long-term value creation,” said John Stankey, CEO of AT&T, who expressed confidence that the ‘spin off’ achieves that goal “because it is simple, efficient, and results in AT&T shareholders owning shares of both companies,” each with the ability to generate better returns consistent with their respective market opportunities.

As the companies had previously indicated, WarnerMedia contributes to the new joint and independent company the film production company Warner Bros., the streaming platform HBO and channels such as Cartoon Network, TCM or CNN. On its side, Discovery Communications provides thematic channels such as Discovery itself, HGTV or Food Network.

In Spain, Discovery is the operator of the channels Dkiss, DMAX or Eurosport, among others. On its side, WarnerMedia also operates as a film production company, as an operator of television channels such as TNT and through the HBO platform.

This operation involves reversing the purchase of TimeWarner by AT&T (later renamed WarnerMedia), which was completed in the first half of 2018 for a total of 85,000 million dollars (75,973 million euros).


World Nation News Desk
World Nation News Deskhttps://worldnationnews.com/
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