AT&T’s WarnerMedia (T) on Monday agreed to a deal with Discovery (DISCB) that will merge their media assets into a new publicly traded company to compete with big-name streaming platforms like Netflix and Disney+.

This deal will combine WarnerMedia’s CNN, HBO, TNT and TBS, and Discovery’s Discovery+ channels like Food Network, TLC and HGTV into one standalone platform.

AT&T acquired WarnerMedia in 2018 after a 2016 bid for its parent company Time Warner.

Discovery CEO David Zaslav will lead the new unnamed business, which expects to launch sometime in mid-2022, according to the press release. Zaslav said the business will hold a little more than $55 billion of debt.

"I think we fit together like a glove," Zaslav said at a virtual press conference.

AT&T will be receiving the $43 billion between cash, debt securities and WarnerMedia’s retention of certain debt as well. Shareholders will receive 71% in this combined company, while those with Discovery stock will receive 29%, USA Today noted.

"We are now in a world where relevance and future success will be tied to greater scale and growth globally," AT&T CEO John Stankey said in a memo to WarnerMedia staffers. "To be one of the best global media companies requires not only broad and deep creative assets, but an investor base and access to capital to make it happen. The decision to combine WarnerMedia with Discovery is rooted in this conclusion."

As of Monday at 11:40 a.m. ET, shares of AT&T were trading at $32.83, up $0.59, or 1.85%, while shares of Discover were trading at $76.75, up $6.24, or 8.86%.

The deal marks a retreat from the blockbuster acquisition announced in 2016 in which AT&T agreed to buy Warner for $85 billion as part of a move to combine content and distribution
The deal marks a retreat from the blockbuster acquisition announced in 2016 in which AT&T agreed to buy Warner for $85 billion as part of a move to combine content and distribution GETTY IMAGES NORTH AMERICA / RONALD MARTINEZ
RELATED STORIES
AT&T