WarnerMedia-Discovery merger gets Justice Department go-ahead, paving the way for 2Q close
- The Justice Department decided not to challenge the WarnerMedia-Discovery deal.
- That paves the way for the media giants to merge as early as April or May, people said.
The planned merger of AT&T's WarnerMedia and Discovery has cleared a big hurdle, paving the way for the deal to close earlier than expected.
The time period mandated by the Hart-Scott Rodino Act in which the Federal Trade Commission and the Antitrust Division of Department of Justice can challenge the proposed agreement has ended, Discovery wrote in an 8K filing dated February 9.
"Any agreement not to consummate the transaction between the parties and the Federal Trade Commission or the Antitrust Division of the United States Department of Justice or any other applicable governmental entity, has also expired or otherwise been terminated," read the filing.
Discovery previously said it expected the deal to close in the second quarter. Now, people familiar with the merger talks say the deal could close in the early part of the quarter, as soon as April. The deal has already been rubberstamped by European regulators.
The news could bring welcome certainty to many of WarnerMedia's 25,600 employees who have been in limbo since news of the merger was announced. That's particularly true for the staff at CNN, who just lost their chief Jeff Zucker after he admitted having a romantic relationship with a subordinate. In the next few weeks, Discovery is expected to share concrete plans for new management at the company across the board.
In conversations with staff in New York earlier this week, WarnerMedia CEO Jason Kilar said he would have more to share about his future with the company in the coming weeks. Kilar is widely expected to step down after the deal closes.
The deal would combine WarnerMedia assets, which include the global operations of CNN and Warner movies and TV operations, with Discovery's assets to create a new venture, headed by Discovery's David Zaslav. AT&T will own a 71 percent stake in the new company, which is aiming to take on tech rivals such as Netflix and Amazon in streaming while rebuilding its traditional businesses such as cable and theatrical movies. Discovery is aiming to create $3 billion in synergies from the deal, which will mean cost-cutting at the merging companies.