Summary
AT&T Inc. has officially completed its previously announced transactions involving the separation of its WarnerMedia business and its merger with Discovery, Inc., now renamed Warner Bros. Discovery, Inc. (WBD). This significant corporate restructuring, finalized on April 8, 2022, involved AT&T distributing shares of its WarnerMedia subsidiary (Spinco) to its stockholders, followed by the merger of Spinco with Discovery. As a result, AT&T stockholders now hold approximately 71% of WBD on a fully diluted basis. The completion of these transactions has yielded substantial cash proceeds for AT&T, amounting to approximately $38.9 billion after accounting for a special cash payment and an additional amount, along with WBD assuming about $1.6 billion in debt. In conjunction with these events, AT&T has also undertaken significant debt reduction, announcing the prepayment of approximately $9.1 billion in term loans and the redemption of over $7.7 billion in various global notes, including a substantial portion of its outstanding 'Make-Whole' notes. This strategic deleveraging is a key focus for investors as AT&T reshapes its business portfolio.
Key Highlights
- 1Completion of the separation of WarnerMedia and its merger with Discovery to form Warner Bros. Discovery (WBD).
- 2AT&T stockholders now hold approximately 71% of the newly formed Warner Bros. Discovery.
- 3AT&T received net cash proceeds of approximately $38.9 billion from the transactions.
- 4WBD assumed approximately $1.6 billion of existing WarnerMedia debt.
- 5AT&T is actively deleveraging by prepaying $9.1 billion in term loans.
- 6AT&T is redeeming over $7.7 billion in various series of Global Notes, including 'Make-Whole' notes.