AT&T outlines WarnerMedia spin-off plan - Mobile World Live

AT&T outlines WarnerMedia spin-off plan

02 FEB 2022
AT&T

AT&T finalised the structure of a plan to combine media unit WarnerMedia with TV company Discovery, explaining it will spin off its holding and assign fractional shares in the newly-created business to its shareholders.

The operator expects the deal to close in Q2, after which existing AT&T shareholders will own around 71 per cent of the new Warner Bros. Discovery business, with the TV company’s backers holding the remainder.

AT&T added it will cut its dividend from $2.08 per share to $1.11 per share after closing the deal to free up cash for investment in growth opportunities.

It highlighted 5G and fibre as target areas for investment, predicting its domestic C-Band network will cover 200 million people by end-2023 and its fibre to cover 30 million locations by end-2025.

The original Discovery agreement involved AT&T receiving $43 billion in cash and other consideration, which it plans to use to reduce debt and capitalise on long-term demand for connectivity.

Details of the spin-off put paid to a potential split-off of WarnerMedia, which would have given investors the right to exchange AT&T shares for stock in the new company.

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Martha DeGrasse

Freelance tech journalist Martha DeGrasse (@mardegrasse) is delighted to be contributing to Mobile World Live. Martha has written for a number of telecom and wireless publications, and was a writer, editor and video producer at RCR Wireless News for almost...

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