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WarnerMedia and Discovery get US government approval to create their new media giant

The deal has cleared antitrust scrutiny

In this photo illustration, a Warner Media LLC logo is seen on a phone in front of a Discovery logo.
Discovery and WarnerMedia are one step closer to merging
Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

The merger of Discovery and WarnerMedia got one step closer to fruition on Wednesday, with the deal clearing an antitrust review from US government agencies, according to a filing with the Securities and Exchange Commission (SEC). Once finalized, the merged company will be one of the biggest media conglomerates in the US, blending Warner Bros.’ TV and movie assets with Discovery’s huge catalog of television programming.

According to the SEC filing:

As of February 9, 2022, Discovery, Inc. (“Discovery”) and AT&T Inc. (“AT&T”) have satisfied the closing condition in Section 9.1(d)(i) of the Agreement and Plan of Merger (the “Merger Agreement”), dated as of May 17, 2021, by and among Discovery, AT&T, Drake Subsidiary, Inc. and Magallanes, Inc. (“Spinco”) relating to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR Act”). The HSR Act statutory waiting period has expired or otherwise been terminated, and any agreement not to consummate the transaction between the parties and the Federal Trade Commission or the Antitrust Division of the United States Department of Justice or any other applicable governmental entity, has also expired or otherwise been terminated.

AT&T announced last May it would spin off WarnerMedia and merge it with Discovery. The deal calls for AT&T to receive $43 billion in a combination of cash, debt securities, and debt retention on the part of WarnerMedia in the all-stock transaction. AT&T bought WarnerMedia (which at the time was still called TimeWarner) in 2016 for $85.4 billion. That deal was finally approved in 2018 after initially being opposed by the Department of Justice. Last June, the companies announced the new media entity would be called Warner Bros. Discovery.

The deal next goes to Discovery shareholders for a vote, which is expected to pass.