AT&T has agreed to combine its WarnerMedia with Discovery, in a bid to create a new streaming giant. The merger was announced on Monday, in a move that would bring HBO, CNN, HGTV, Animal Planet and Food Network as well as the Warner Bros. movie studio under the same company.
The boards of both AT&T and Discovery approved the transaction over the weekend. AT&T shareholders are set to own 71% of the new company, while Discovery shareholders would get 29%. AT&T also would receive $43 billion in cash as well as debt securities.
The merger is likely the result of TV networks facing competition from online streaming services such as Netflix, and as cable television ratings continue to drop.
AT&T owns CNN, HBO and Warner Bros, after the $108.7bn acquisition of Time Warner in 2018.
“This agreement unites two entertainment leaders with complementary content strengths and positions the new company to be one of the leading global direct-to-consumer streaming platforms,” said AT&T chief executive John Stankey.
The merger still needs to be approved by the FTC, and is expected to close in 2022.