AT&T Inc said on Tuesday it will spin off WarnerMedia in a $43 billion transaction to merge its media properties with Discovery Inc and also cut its dividend by nearly half.
AT&T shareholders will own 71% of the new Warner Bros. Discovery company and will receive a 0.24 shares of Warner Bros. Discovery for each AT&T share they own. AT&T will have 7.2 billion diluted shares outstanding after the transaction closes.
AT&T said it expected the debt ratio to drop to 2.5 times by the end of 2023 and that it would consider share buybacks if the ratio is reduced further.
Walt Disney Co’s financial results due next week will provide another gauge of the vitality of the streaming business as Wall Street questions if the industry-wide reorganization to focus on streaming video will pay off long term.
Read more: Reuters
