AT&T has completed the spinoff of WarnerMedia.
Justin Sullivan/Getty Images
AT&T
wrapped up its WarnerMedia spinoff late last week, setting the stage for its shares to open higher on Monday
The stock was rising 2.3% to $18.64 in premarket trading.
AT&T (ticker: T) in February decided to structure WarnerMedia’s divestiture as a spinoff instead of a split-off, or exchange. A split-off would have given AT&T holders the option of exchanging their holdings for shares in the new publicly traded Warner Bros. Discovery. The current spinoff gives shareholders a part of the combined company for each share of AT&T they held at close.
The telecom giant had announced the $43 billion transaction with
Discovery (DISCA) about a year ago. The sale was part of AT&T’s strategy to create a more focused communications business consisting of just its mobility, consumer wireline, and business wireline subsegments.
“With the close of this transaction, we expect to invest at record levels in our growth areas of 5G and fiber, where we have strong momentum, while we work to become America’s best broadband company,” said AT&T CEO John Stankey. “At the same time, we’ll sharpen our focus on returns to shareholders.”
At close, AT&T received $40.4 billion in cash and WarnerMedia’s retention of certain debt, according to a press release. Shareholders of AT&T received a little more than 0.24 shares of the new Warner Bros. Discovery for each share of AT&T they held.
“We expect to invest for growth, strengthen our balance sheet and reduce our debt, all while continuing to pay an attractive dividend that puts us among the top dividend paying stocks in America,” Stankey said.
Write to Karishma Vanjani at karishma.vanjani@dowjones.com
