AT&T and Discovery aim to bring together TV channels, the Warner Bros. film studio, and streaming services HBO Max and Discovery+.
The European Commission, the executive body of the European Union, has approved Discovery’s acquisition of AT&T’s WarnerMedia business.
David Zaslav, President and Chief Executive Officer of Discovery, and the future CEO of the combined company, 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.”
Discovery currently anticipates the closing of the WarnerMedia transaction to occur in mid-2022, subject to approval by Discovery stockholders and additional customary closing conditions, including other regulatory approvals, namely in the US. No approval is required by AT&T stockholders.
In May it was revealed that AT&T is spinning off WarnerMedia to combine it with Discovery, a transaction expected to close in mid-2022 pending regulatory approvals. The proposed merger would combine WarnerMedia’s assets, including HBO Max, Turner and Warner Bros., with Discovery’s collection of domestic and international cable channels, including Discovery, TLC, Animal Planet, OWN, Food Network and HGTV.
Under the planned WarnerMedia spin, the telco will receive $43bn in cash to pay down debt. In November, Discovery projected that the combined entity would have a debt ratio of 4.5 times annual earnings before interest, taxes, depreciation and amortisation, down from the previous expectation of five times EBITDA.