Discovery’s Acquisition of WarnerMedia

Sullivan & Cromwell LLP served as legal advisor to AT&T, Debevoise & Plimpton LLP and Proskauer served as legal advisor to Discovery, Wachtell Lipton, Rosen & Katz served as advisors to the Independent Directors of Discovery, Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal advisors to Advance on the deal. Fried Frank acted as counsel to LionTree LLC as financial advisor to AT&T Inc.
Simpson Thacher represented J.P. Morgan Securities LLC, Goldman Sachs Lending Partner and Goldman Sachs & Co. LLC on the deal.

Discovery, Inc. (NASDAQ: DISCA, DISCB, DISCK) executed its acquisition of WarnerMedia from AT&T Inc. (NYSE: T), in a transaction that values the combined entity at approximately $130 billion. Under the terms of the agreement, which is structured as a Reverse Morris Trust transaction, AT&T would receive $43 billion (subject to adjustment) in a combination of cash, debt securities, and WarnerMedia’s retention of certain debt, and AT&T’s shareholders would receive stock representing 71% of the new company; Discovery shareholders would own 29% of the new company.  The notes are being offered by Spinco and the selling securityholders, as applicable, in connection with the previously announced combination of Discovery, Inc. (“Discovery”) and the business, operations and activities that constitute a portion of the WarnerMedia segment of AT&T in a Reverse Morris Trust-type transaction. Spinco intends to use the net proceeds from the notes offering to fund the special cash payment to AT&T and pay fees and expenses related to the notes offering. The selling securityholders received the notes offered by them from AT&T in satisfaction of indebtedness held by certain of their affiliates outstanding under the Exchange Term Loan.

The Firm also represented Goldman Sachs Lending Partners LLC, as agent, and the lenders party thereto in providing a new $10 billion senior unsecured term loan to AT&T.

The new company will compete globally in the fast-growing direct-to-consumer business — bringing compelling content to DTC subscribers across its portfolio, including HBO Max and the recently launched discovery+. The transaction will combine WarnerMedia’s storied content library of popular and valuable IP with Discovery’s global footprint, trove of local-language content and deep regional expertise across more than 200 countries and territories. The new company will be able to invest in more original content for its streaming services, enhance the programming options across its global linear pay TV and broadcast channels, and offer more innovative video experiences and consumer choices.

AT&T Inc. (NYSE:T) is a diversified, global leader in telecommunications, media and entertainment, and technology. Discovery, Inc. (Nasdaq: DISCA, DISCB, DISCK) is a global leader in real life entertainment, serving a passionate audience of superfans around the world with content that inspires, informs and entertains. 

LionTree LLC and Goldman Sachs & Co. LLC served as financial advisors to AT&T. Allen & Company LLC and J.P. Morgan Securities LLC served as financial advisors to Discovery. Perella Weinberg Partners served as advisor to the Independent Directors of Discovery. RBC Capital Markets served as financial advisors to Advance.

The Debevoise team was led by M&A partners Jonathan Levitsky (Picture), Sue Meng and Jeffrey Rosen and includes associates Erik Andrén, Marisa Demko, Katherine Durnan, Robert Geren, Sarah Jacobson and Caitlin Joseph, finance partners Jeffrey Ross and Ramya Tiller and associates Jordana Palgon and Jonathon Yeung, benefits partner Lawrence Cagney and associates Simone Hicks, Spencer Mizerak and Wendy Widman, tax partners Gary Friedman and Peter Furci and associates Benjamin Friedman and Cameron Rotblat, capital markets partner Matthew Kaplan and associates Alice Gu and Benjamin Pedersen and intellectual property partner Henry Lebowitz and associates Tigist Kassahun and Emily Mackay.

The Simpson Thacher team included Art Robinson, David Azarkh, Patrick Baron, Matt Petrone and Pia Figuerola (Capital Markets); Patrick Ryan and Adam Moss (Banking and Credit); Andrew Purcell and Lina Pan (Tax); Kristy Fields (Executive Compensation and Employee Benefits); Abram Ellis, Mark Skerry and Christine Tillema (Regulatory); Genevieve Dorment and Rachelle Broida (Intellectual Property); Tim Mulvihill (Environmental); and Jennie Getsin (Blue Sky).

The Proskauer team advising Discovery was led by partner and TMT Group co-head Rob Freeman and included partner Wai Choy and associates Kevin Milewski and Jordan Horowitz (TMT) and associate Theresa Smith (Corporate).

Wachtell, Lipton, Rosen & Katz advised the Independent Directors of Discovery with a team led by corporate partners Andrew Nussbaum and Karessa Cain and litigation partner Theodore Mirvis.

The Paul, Weiss team advising Advance included corporate partners Robert Schumer, Ariel Deckelbaum, Cullen Sinclair, Tracey Zaccone, Caith Kushner and John Kennedy and counsel Jason Tyler and Frances Mi; tax partners Jeffrey Samuels and Brian Krause and counsel Alyssa Wolpin; litigation partners Jaren Janghorbani, Rick Rule, Aidan Synnott and Lewis Clayton and counsel Paul Paterson; executive compensation partner Lawrence Witdorchic; and antitrust counsel Marta Kelly and Yuni Sobel.

Fried Frank acted as counsel to LionTree LLC with a team led by corporate partner Warren S. de Wied and included corporate partner Roy Tannenbaum and corporate associate Bradley Russian.

Involved fees earner: Erik Andrén – Debevoise & Plimpton; Lawrence Cagney – Debevoise & Plimpton; Marisa Demko – Debevoise & Plimpton; Katherine Durnan – Debevoise & Plimpton; Gary Friedman – Debevoise & Plimpton; Peter Furci – Debevoise & Plimpton; Robert Geren – Debevoise & Plimpton; Simone Hicks – Debevoise & Plimpton; Sarah Jacobson – Debevoise & Plimpton; Caitlin Joseph – Debevoise & Plimpton; Matthew Kaplan – Debevoise & Plimpton; Tigist Kassahun – Debevoise & Plimpton; Henry Lebowitz – Debevoise & Plimpton; Ben Lee Friedman – Debevoise & Plimpton; Jonathan Levitsky – Debevoise & Plimpton; Emily Mackay – Debevoise & Plimpton; Sue Meng – Debevoise & Plimpton; Spencer Mizerak – Debevoise & Plimpton; Benjamin Pedersen – Debevoise & Plimpton; Jeffrey Rosen – Debevoise & Plimpton; Jeffrey Ross – Debevoise & Plimpton; Cameron Rotblat – Debevoise & Plimpton; Ramya Tiller – Debevoise & Plimpton; Wendy Widman – Debevoise & Plimpton; Jonathon Yeung – Debevoise & Plimpton; Warren de Wied – Fried Frank Harris Shriver & Jacobson; Bradley Russian – Fried Frank Harris Shriver & Jacobson; Roy Tannenbaum – Fried Frank Harris Shriver & Jacobson; Lewis Clayton – Paul Weiss Rifkind Wharton & Garrison; Ariel Deckelbaum – Paul Weiss Rifkind Wharton & Garrison; Jaren Janghorbani – Paul Weiss Rifkind Wharton & Garrison; Marta Kelly – Paul Weiss Rifkind Wharton & Garrison; John Kennedy – Paul Weiss Rifkind Wharton & Garrison; Caith Kushner – Paul Weiss Rifkind Wharton & Garrison; Frances Mi – Paul Weiss Rifkind Wharton & Garrison; Paul Paterson – Paul Weiss Rifkind Wharton & Garrison; Rick Rule – Paul Weiss Rifkind Wharton & Garrison; Jeffrey Samuels – Paul Weiss Rifkind Wharton & Garrison; Robert Schumer – Paul Weiss Rifkind Wharton & Garrison; Cullen Sinclair – Paul Weiss Rifkind Wharton & Garrison; Yuni Sobel – Paul Weiss Rifkind Wharton & Garrison; Aidan Synnott – Paul Weiss Rifkind Wharton & Garrison; Jason Tyler – Paul Weiss Rifkind Wharton & Garrison; Lawrence Witdorchic – Paul Weiss Rifkind Wharton & Garrison; Alyssa Wolpin – Paul Weiss Rifkind Wharton & Garrison; Tracey Zaccone – Paul Weiss Rifkind Wharton & Garrison; Wai Choy – Proskauer Rose; Rob Freeman – Proskauer Rose; Jordan Horowitz – Proskauer Rose; Kevin Milewski – Proskauer Rose; Theresa Smith – Proskauer Rose; David Azarkh – Simpson Thacher & Bartlett; Patrick Marc Baron – Simpson Thacher & Bartlett; Rachelle Broida – Simpson Thacher & Bartlett; Genevieve Dorment – Simpson Thacher & Bartlett; Abram Ellis – Simpson Thacher & Bartlett; Kristy Fields – Simpson Thacher & Bartlett; Pia Figuerola – Simpson Thacher & Bartlett; Jennie Getsin – Simpson Thacher & Bartlett; Adam Moss – Simpson Thacher & Bartlett; Timothy Mulvihill – Simpson Thacher & Bartlett; Lina Pan – Simpson Thacher & Bartlett; Matthew Petrone – Simpson Thacher & Bartlett; Andrew Purcell – Simpson Thacher & Bartlett; Arthur Robinson – Simpson Thacher & Bartlett; Patrick Ryan – Simpson Thacher & Bartlett; Mark Skerry – Simpson Thacher & Bartlett; Christine Tillema – Simpson Thacher & Bartlett; Brian Krause – Skadden; Karessa Cain – Wachtell, Lipton, Rosen & Katz; Theodore Mirvis – Wachtell, Lipton, Rosen & Katz; Andrew Nussbaum – Wachtell, Lipton, Rosen & Katz;

Law Firms: Debevoise & Plimpton; Fried Frank Harris Shriver & Jacobson; Paul Weiss Rifkind Wharton & Garrison; Proskauer Rose; Simpson Thacher & Bartlett; Skadden; Wachtell, Lipton, Rosen & Katz;

Clients: Advance; Discovery Inc.; Discovery Inc. – Independent Directors; Goldman Sachs & Co.; Goldman Sachs Lending Partners LLC; JP Morgan Securities; LionTree Advisors LLC;