AT&T agreed to the deal to merge its media arm WarnerMedia with Discovery creating a brand-new entertainment company that would “combine AT&T’s vast media holdings with Discovery’s reality-TV empire.”
The deal, which was valued at $130 billion, would combine assets consisting of CNN, HBO, HGTV, and WarnerMedia which owns Cartoon Network, TNT, CNN, HBO, and WarnerBros. Studio, potentially making it the biggest TMT deal of the year. A significant goal of the merger is to create a contender to massive entertainment organizations such as Netflix Inc. and Walt Disney Co.
The new company, which has yet to receive a name, is planning on utilizing the merger of assets to greatly expand the content offered by HBO Max in an effort to become one of the leading streaming service providers.
WarnerMedia CEO Jason Kilar also believes that if HBO Max was provided to existing customers of AT&T’s phone and broadband services, they would be much less likely to cancel their subscription. Discovery Chief Executive Officer David Zaslav has high hopes for this merger as he stated, “I expect AT&T is going to be the No. 1 telecom and communications company in the world.”