Why it matters: With the deal, AT&T is essentially unwinding its mega merger with Fourth dimension Warner, conceding that it wasn't able to go blow for blow with titans similar Netflix and Disney in the streaming video wars. Earlier this yr, Verizon did the aforementioned past selling off AOL and Yahoo for a fraction of what information technology initially paid.

The streaming video race is heating upwardly as AT&T has appear plans to spin off its WarnerMedia unit and combine it with Discovery to create a standalone global entertainment company.

Discovery CEO David Zaslav will lead the new company. AT&T will initially engage seven of the new visitor's board members, with Discovery being responsible for the remaining six.

The deal, which is being structured as an all-stock, Opposite Morris Trust transaction, will meet AT&T's shareholders receive 71 percent of the new company and Discovery shareholders getting the remaining 29 percent. Discovery's current multiple classes of shares volition exist consolidated into a single class, with one vote per share. AT&T volition receive $43 billion in a combination of cash, debt securities and WarnerMedia's retention of certain debt.

Combined, the new company volition have a massive content library featuring more than 100 popular brands, including HBO, Warner Bros., Discovery, Cartoon Network and CNN, just to name a few.

Board members of AT&T and Discovery have approved the bargain. Pending customary regulatory approving and endmost conditions, the transaction is expected to close in mid-2022.

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