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Warner Brothers Discovery announced on Monday that it would separate its studio and divide into two companies and Streaming business From its cable TV network.
HBO and CNN’s original company is Divided into two firms To help better competing in streaming, because this step is expected to give the WBD’s streaming unit more room to score its content production without wearing the declining cable network within the company.
Warner Brothers Discovery CEO David Zaslav will lead the streaming and studio business after partition, while CFO Gunar will lead Widenfels Global Networks Unit.
“By acting as two separate and customized companies in the future, we are strengthening these reputed brands with sharp focus and strategic flexibility, which they need to compete most effectively in today’s developed media scenario,” Jaslav said.
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Warner Brothers Discovery will divide their studio and streaming businesses from their cable TV networks in the deal to be completed next year. (Photographer: Yuki Evamura / Bloomberg Getty Embolce / Getty Image)
Corporate partition comes a few years after the 2022 merger of Warnemedia and Discovery will come and structures as one Tax-free transactionWhich is expected to be completed by mid -2012.
WBD shares climbed 8% during morning trading.
The company prepared the basis for potential sales or spinoff cable TV Property in December, when he announced to separate his streaming and studio operations.
| Langer | Security | Last | Change | Change % |
|---|---|---|---|---|
| WBD | Warner Brothers. Discovery Inc. | 9.53 | -0.29 |
-2.95% |
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Split will align the company with comcast, which is closing most of its cable TV networks.
Bank of America research analyst Jessica Rif Erlich said Warner Brothers Discovery’s cable TV property is a “very logical partner” for the new spinoff company of COCCAT.
Disney unveiled the new direct-to-conjumer ESPN streaming service with a $ 29.99 price tag
Warner Brothers Discovery CEO David Jaslav announced the partition. (Michael M. Santiago / Getty Images / Getty Images)
WBD also launched a tender proposal on Monday Reorganization of your existing debtWhich is funded by a $ 17.5 billion bridge provided by JP Morgan.
The Bridge Loan is expected to be refinance before planned separation and the company said that Global Network will retain the 20% stake in division streaming and studio, which it plans to mudge to reduce its debt.
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JP Morgan and Evercore are advising WBD on the deal, while Kirkland and Ellis are serving as a legal lawyer.
Reuters contributed to this report.
