AT&T spins off WarnerMedia for $43 billion to form new company with Discovery

Feb. 1 (UPI) -- Telecommunications giant AT&T announced on Tuesday that it's selling all of its interest in WarnerMedia for more than $40 billion and spinning it into a new company related to its recent merger with Discovery.

AT&T merged WarnerMedia with Discovery last May to form a standalone media and entertainment company. In its announcement Tuesday, the company said its board of directors approved selling the interest in WarnerMedia for $43 billion.

The transaction will create a new company, Warner Bros. Discovery.

AT&T shareholders will own about 71% of the new company and receive 0.24 shares of Warner Bros. Discovery for each AT&T share they own.

"We were guided by one objective -- executing the transaction in the most seamless manner possible to support long-term value generation," AT&T CEO John Stankey said in a statement.

"We are confident the spin-off achieves that objective because it's simple, efficient and results in AT&T shareholders owning shares of both companies."

WarnerMedia's merger with Discovery was announced eight months ago, but financial details were made public with the announcement of the spinoff Tuesday.

The move will help reduce AT&T's debt, which was about $156 billion at the end of 2021.

Warner Bros Discovery intends to compete with other video streaming services like Netflix.