Spin-off Links – May 2021
New Spin-off Announcements
AT&T Inc.(T) announced that it had reached a deal to spin off WarnerMedia (CNN, HBO, TNT, TBS, and Warner Bros. studio) and simultaneously merge it with Discovery Inc. (DISCA), creating a new publicly traded company.
The move comes just three years after AT&T’s creation of WarnerMedia through its $85 billion acquisition of Time Warner, which was scrutinized by the DOJ on antitrust grounds.
This combination of Discovery, Inc. and WarnerMedia will form one of the largest global streaming players. The new “pure play” content company will own one of the deepest content libraries, with over 200,000 hours of programming across all streaming platforms.
The deal is expected to create substantial value for shareholders of both companies, better positioning them to take advantage of growing DTC (direct-to-consumer) trends in the media industry. The construction of the new company will create significant scale and investment resources with projected 2023 Revenue of approximately $52 billion, adjusted EBITDA of approximately $14 billion, and an industry leading Free Cash Flow conversion rate of approximately 60%. It i