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WarnerMedia-Discovery merger clears final US antitrust hurdle as deal nears finish line

The WarnerMedia-Discovery merger has cleared its final antitrust hurdle in the US, paving the way for the US$43bn deal to officially close.

David Zaslav

In a regulatory filing, Discovery disclosed that the deal had satisfied closing conditions related to the Hart-Scott-Rodino Antitrust Improvements Act, which is a US federal law requiring parties involved in certain transactions to file a notification with the Federal Trade Commission (FTC) and the Department of Justice Antitrust Division.

In the filing, Discovery said “any agreement not to consummate the transaction between the parties and the FTC or the Antitrust Division of the United States Department of Justice or any other applicable governmental entity has also expired or otherwise been terminated.”

The mega-merger will see AT&T spin off WarnerMedia and combine it with Discovery. AT&T will receive around US$43bn in a combination of cash, debt securities and WarnerMedia’s retention of certain debt. Meanwhile, AT&T shareholders will receive a 71% stake in the new company and Discovery shareholders will receive the remaining 29%.

The deal has not yet received official approval from Discovery’s shareholders but that is thought to be a formality.

News of the regulatory clearance in the US comes seven weeks after the deal, which was first unveiled last May, won unconditional antitrust clearance from the European Commission. Two weeks ago, AT&T CEO John Stankey said the deal would likely close at some point in Q2.

Discovery president and CEO David Zaslav, who will lead the merged entity, has previously vowed to unveil a “shock and awe” strategy.


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