AT&T has confirmed that the mechanism for its separation of WarnerMedia will be a spin-off, followed by the subsequent combination of WarnerMedia with Discovery.
The transaction itself was announced in May of last year, but the mechanism — a stock split or a spin-off — had not been confirmed, and on the company’s most recent quarterly call, analysts were keen to know which it would be. AT&T will receive $43 billion in a combination of cash and other considerations; the transaction is expected to close in the second quarter of 2022.
AT&T shareholders will receive stock representing about 71% of the new company and existing Discovery shareholders will hold about 29% of it.
