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Following a weekend of vague rumors of mergers, AT&T has announced intentions for WarnerMedia and Discovery to merge into a new company in 2022.

In a surprise move that has been worked on in secret for months, WarnerMedia and Discovery will merge into one massive entertainment company. Under the terms of the agreement, AT&T would receive $43 billion in a combination of cash, debt securities, and retention of certain debts. AT&T stockholders will receive stock representing 71% of the newly formed company, while Discovery shareholders will own 29%.

The deal has been approved by the board of directors of both AT&T and Discovery with an eye to finalizing the deal in 2022 pending regulatory approvals.

WarnerMedia and Discovery brands
Image via Julia Alexander

“This agreement unites two entertainment leaders with complementary content strengths and positions the new company to be one of the leading global direct-to-consumer streaming platforms,” said AT&T CEO John Stankey in a statement. “It will support the fantastic growth and international launch of HBO Max with Discovery’s global footprint and create efficiencies which can be re-invested in producing more great content to give consumers what they want.”

“During my many conversations with John, we always come back to the same simple and powerful strategic principle: these assets are better and more valuable together. It is super exciting to combine such historic brands, world-class journalism, and iconic franchises under one roof and unlock so much value and opportunity,” Added Discovery CEO David Zaslav. “With a library of cherished IP, dynamite management teams and global expertise in every market in the world, we believe everyone wins…consumers with more diverse choices, talent and storytellers with more resources and compelling pathways to larger audiences, and shareholders with a globally scaled growth company committed to a strong balance sheet that is better positioned to compete with the world’s largest streamers.”

Zaslav will serve as the CEO of the newly combined company.

As of Monday, the plans for the respective streaming services – HBO Max and Discovery Plus – are still unclear. At a minimum, there could be a bundle deal for subscribing to both. There are also discussions, however, of merging the two services into one giant service. As it stands, Discovery Plus has access to over 50,000 television episodes from its combined brands of Discovery, Food Network, and more. Bringing that content under the same roof with HBO Max would make it one of the most extensive streaming services in the world by content amount alone.

As to what this means for the future of film production, there are no suggestions that any plans have changed. As details of the deal come to light in the months to come, we are sure to learn more.