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European Commission gives Discovery-WarnerMedia merger greenlight

Companies are planning to combine in order to create a new 'super streamer'

The European Commission has granted unconditional antitrust approval of Discovery’s proposed acquisition of AT&T’s WarnerMedia business.

The deal, first announced in May, will see WarnerMedia’s entertainment, sports and news assets join forces with Discovery’s nonfiction and international entertainment and sports businesses to create a stand-alone global entertainment company.

Under terms of the agreement, which is structured as an all-stock transaction, AT&T would receive $43 billion in a combination of cash, debt securities, and WarnerMedia’s retention of certain debt, and AT&T’s shareholders would receive stock representing 71 per cent of the new company; Discovery shareholders would own 29 per cent of the new company.

“Approval from the European Commission is a key milestone toward completing our proposed transaction with AT&T,” said David Zaslav, president and chief executive officer of Discovery, and the future CEO of the combined company.

“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 said it expects the transaction to complete in mid-2022, subject to approval by Discovery stockholders and other regulatory approvals, namely in the United States.