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WarnerMedia and Discovery Inc. Announce Definitive Agreement to Create Standalone Company

On Monday May 17, WarnerMedia’s Parent Company AT&T (NYSE: T) and Discovery Inc. (NASDAQ: DISCA) announced that they have signed a definitive agreement to combine WarnerMedia’s Assets with Discovery’s content. The result will be a standalone global entertainment company.

Transaction Details

The agreement is structured as an all-stock Reverse Morris Trust transaction. Under the terms of the agreement, AT&T would receive $43 billion in a combination of cash, debt securities, and WarnerMedia’s retention of certain debt. AT&T’s shareholders would receive stock representing 71% of the new company and Discovery shareholders would own 29% of the new company. The $43 billion payout would be subject to adjustment. AT&T and Discovery’s Boards of Directors have both …

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