AT&T is in talks about a merger of Warnermedia with Discovery

According to informed people, the telecom group AT&T is in talks about a merger of its widely branched Warnermedia division with the media company Discovery Inc. The talks, which should assess the value of the AT&T business with over 50 billion US dollars including debt, could still be in an agreement today flow out, said the people. However, the negotiations could still fail. A deal between Warnermedia and Discovery would further consolidate the media business, which is increasingly suffering from the trend away from cable television and competition from streaming services. Warnermedia includes cable channels such as HBO, CNN, TNT and TBS, as well as the television and film studio Warner Bros. Discovery has a portfolio that includes its network of the same name and HGTV. Discovery boss David Zaslav is expected to head the new company, the informants said. It is uncertain whether Jason Kilar, the current head of Warnermedia, will continue in a subordinate position. The possible merger is, however, a surprising U-turn by AT&T, because the group had massively relied on media in 2018 with the acquisition of Time Warner Inc. for around 81 billion dollars. This deal made AT&T the most heavily indebted company in the world outside of the financial sector. If the deal goes through, AT&T CEO John Stankey will have reversed the two biggest deals his predecessor Randall Stephenson made in his ten months at the helm. At the beginning of the year AT&T had agreed with the private equity firm TPG to part with a 30 percent stake in its DirecTV business for 1.8 billion dollars. AT&T acquired DirecTV in 2015 for $ 49 billion. Stephenson had retired last summer. A veteran of the phone industry, Stankey was a major backer of the mega-mergers and later led the integration of the two companies. But Stankey also said he would not consider any asset sacred and could part with any deal that did not add to the parent company's total value. DirecTV has lost more than seven million subscribers in the past two years.