AT&T merging WarnerMedia division with Discovery Inc.

AT&T is merging its WarnerMedia division with Discovery Inc. to create a new publicly traded company focused on entertainment, the company announced Monday.

The deal would leave AT&T focused on broadband and mobile connectivity and a new, yet unnamed company focused on streaming, entertainment and news.

After the deal, the new company will control all of WarnerMedia which includes CNN, Warner Bros., HBO, HBO Max, Turner Sports, TNT, TBS, TCM, Cartoon Network and other media brands.

It will also own all of Discovery Inc., which owns the Discovery Channel, Food Network, HGTV, the Science Channel, Animal Planet and many more U.S. and international entertainment media brands.

AT&T shareholders will own 71 percent of the new company and Discovery shareholders will own 29 percent. Discovery’s current CEO David Zaslav will become CEO of the new company.

In return for WarnerMedia, AT&T will get $43 billion in cash and debt securities and the new company keeps some of WarnerMedia’s debt.

The new company’s content library will have some 200,000 hours of content and will reach more than 220 countries and territories. Executives project it to earn around $52 billion of revenue in 2023, with approximately $15 billion of that coming from streaming services.