Currently, the deal is expected to close in mid-2022 with pending approval from Discovery’s stockholders and other regulatory approvals
The European Commission has approved the Discovery, AT&T deal. (Credit: Dimitris Vetsikas from Pixabay)
Discovery has secured unconditional antitrust clearance from the European Commission (EC) for its previously announced $43bn acquisition of AT&T’s WarnerMedia business.
The deal, which was announced in May 2021, had been taken up by the two firms with an aim to create an independent streaming company.
It will see WarnerMedia’s entertainment, sports, and news assets combined with the nonfiction and international entertainment and sports businesses of Discovery.
The merged entity is expected to serve direct-to-consumer (DTC) subscribers with content from HBO Max, Discovery, discovery+, Warner Bros., CNN, Eurosport, Cartoon Network, Animal Planet, and others.
Discovery president and CEO David Zaslav said: “Approval from the European Commission is a key milestone toward completing our proposed transaction with AT&T.
“Today we move one important step closer to creating Warner Bros. Discovery, a premier entertainment company that will be one of the world’s leading investors in premium content and one positioned to serve consumers with what we believe will be the most complete content offering under one roof.”
Zaslav had also been announced as the future CEO of the combined firm.
Under the terms of the deal, AT&T will be paid $43bn in the form of cash, debt securities, and WarnerMedia’s retention of certain debt. Additionally, AT&T’s shareholders will hold a 71% stake in the new company, while the remaining 29% interest will be held by Discovery’s shareholders.
Discovery said that it currently expects the deal to close in mid-2022. The transaction remains to be contingent on approval from Discovery’s stockholders, other regulatory approvals, and other customary closing conditions.
The deal is not subject to approval by AT&T stockholders.