AT&T opts for WarnerMedia spinoff in Discovery merger, cuts dividend

FILE PHOTO: The AT&T logo is seen in a store window in the Manhattan borough of New York City, New York, U.S., January 19, 2022. REUTERS/Brendan McDermid

(Reuters) - AT&T Inc said on Tuesday it will spin off WarnerMedia in a $43 billion transaction to merge its media properties with Discovery Inc and also cut its dividend by nearly half.

AT&T shareholders will own 71% of the new Warner Bros. Discovery company and will receive a 0.24 shares of Warner Bros. Discovery for each AT&T share they own. AT&T will have 7.2 billion diluted shares outstanding after the transaction closes.