AT&T is in Advanced Talks to Merge WarnerMedia with Discovery

In a deal that could be announced as soon as later today, AT&T is in advanced discussions to merge WarnerMedia with Discovery.

The transaction would create a new company that would be publicly traded and would be co-owned by both AT&T and Discovery shareholders.

According to a CNBC report citing sources that are familiar with the situation, the deal is expected to strengthen the combined company against rival media giants such as Netflix and Disney.

The sources, who remain anonymous, have said the deal could be announced today. The discussions are still private. Talks aren’t final and could still fall apart, said the people.

Discovery has a $16 billion market capitalization and a $30 billion enterprise value. AT&T acquired Time Warner, since renamed to WarnerMedia, for $85 billion in equity value back in 2018.

Bloomberg News was the first to report on the talks between AT&T and Discovery for their content assets.

Rich Greenfield, an analyst at LightShed Partners, has argued that AT&T and Comcast Corp. should spin off their media assets and combine them in a new company.

On Sunday, Greenfield tweeted that he could “certainly imagine the secularly declining Turner assets merged with Discovery for scale,” but said it was “harder to imagine” HBO Max and AT&T’s Warner Bros studio being part of a combined company.

AT&T was the second-highest bidder in the Federal Communications Commission’s sale of airwaves, committing $23 billion behind Verizon, who had agreed to pay $45 billion dollars.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.