(Boursier.com) — AT&Ta US telecommunications operator, announced on Tuesday the planned spin-off of WarnerMedia in a deal valued at $43 billion, merging its media properties with Discovery Inc.. AT&T has also amply reduced its dividend. Under the announced transaction, current AT&T shareholders would own 71% of the new Warner Bros. entity. Discovery, since they would receive 0.24 of the entity’s stock for each AT&T share held. The operator reduces its dividend to $1.11 per title, against $2.08 previously.
John Stankey, AT&T’s chief executive, believes that “split distribution will allow the market to do what markets do best.” He said he is confident that both stocks will be quickly valued based on the strong fundamentals and outlook presented. AT&T also intends to invest $20 billion this year in fiber for broadband internet services and expanding its footprint in the 5G wireless market. The combination of WarnerMedia and Discovery, meanwhile, is expected to be finalized in the second quarter.
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