Warner Bros. Discovery acquires WarnerMedia (AT&T)

Warner Bros. Discovery acquired WarnerMedia (AT&T) for approximately $43 billion (subject to adjustment), a transaction completed in April 2022, structured as all-stock Reverse Morris Trust (cash, debt securities, and WarnerMedia debt retention to AT&T; AT&T shareholders received 71% and Discovery shareholders 29% of the new company). The deal was a merger.

WarnerMedia (AT&T) operates in Studios, Networks & Direct-to-Consumer streaming, is based in Dallas, TX (AT&T/WarnerMedia) and New York, NY (Discovery); global operations, had revenue of about new company projected 2023 revenue ~$52 billion; adjusted EBITDA ~$14 billion. Discovery, Inc. combined with AT&T's WarnerMedia premium entertainment, sports and news assets to create a premier standalone global entertainment company, Warner Bros. Discovery, which began trading on the Nasdaq as 'WBD' on April 11, 2022. The combination brought together WarnerMedia's studios and portfolio of scripted entertainment, animation, news and sports (Warner Bros., HBO, HBO Max, CNN, DC, TNT, TBS, Cartoon Network, Turner Classic Movies) with Discovery's leadership in unscripted and international entertainment and sports (Discovery Channel, discovery+, HGTV, Food Network, TLC, Eurosport).

Under the terms of the agreement, which is structured as an all-stock, Reverse Morris Trust transaction, AT&T would receive $43 billion (subject to adjustment) in a combination of cash, debt securities, and WarnerMedia's retention of certain debt, and AT&T's shareholders would receive stock representing 71% of the new company; Discovery shareholders would own 29%. The companies projected the new company would have 2023 revenue of approximately $52 billion, adjusted EBITDA of approximately $14 billion, and at least $3 billion in expected annual cost synergies.

WarnerMedia brought scripted studios, HBO/HBO Max, CNN and iconic franchises (DC, Harry Potter, Game of Thrones) that complemented Discovery's unscripted and international strengths, giving the combined company scale to compete with Netflix and Disney in global streaming. at least $3 billion in expected cost synergies annually for the new company, to be reinvested in content Combined into Warner Bros. Discovery, Inc.; David Zaslav named CEO; 13-member board (7 appointed by AT&T, 6 by Discovery)