The proposed merger between Discovery and WarnerMedia, which would see the former acquire the latter from under the umbrella of telecoms giant AT&T, has finally been given the green light by the European Commission to go ahead.
Discovery announced today that it has finally received unconditional antitrust approval for the deal from the European Commission, bringing it one step closer to the completion of the merger. The plans to move WarnerMedia from under AT&T to merge with Discovery were first announced in May this year, but only today did the European Commisson – the executive body of the European Union – give the deal the much-needed go-ahead.
Plans for the merger included David Zaslav, current President and Chief Executive Officer of Discovery continuing as the CEO of the new merged company. AT&T and Discovery plans to bring television stations like CNN, TBS, TNT, HGTV, Food Network and Discovery Channel together under one umbrella. It also plans to include streaming services HBO Max (owned by Warner Bros.) and Discovery+.
According to Discovery, the deal is expected to be closed in mid-2022, as it still waits on other approvals from regulatory bodies and the final go ahead from the company’s shareholders. AT&T’s shareholders do not need to give any approval for the deal to go through.
The deal has been said to be worth $43 billion. The decision from AT&T to sell WarnerMedia to Discovery for just over half of the price it was bought shows that WarnerMedia (which was known as Time Warner at the time of the initial acquisition) did not live up to the expectations placed on it by the telecoms company.
AT&T acquired WarnerMedia back in 2018 for a fee of $85 billion, as the streaming market began to experience a battle of strength, dominated by heavyweights Netflix and Disney.
Now, the new deal is expected to pile pressure on streaming heavyweights Netflix and Disney, as the combined strength of Discovery and WarnerMedia is sure to place the new “Warner Bros. Discovery” company in direct competition with other streaming heavyweights.