AT&T agrees to merge media business with Discovery

AT&T Inc. and Discovery Inc. reached a deal to combine their media assets into a new publicly traded company, unwinding the telecom company’s big bet on entertainment after less than three years.

The new business, which isn’t yet named, will be led by current Discovery Chief David Zaslav. The companies said AT&T’s Jason Kilar will retain his title as WarnerMedia CEO. AT&T shareholders will hold a 71% stake in the new entity, while Discovery shareholders own a 29% stake.

In exchange, AT&T said it would receive $43 billion of cash, debt securities and WarnerMedia’s retention of certain debt.