By Dhirendra Tripathi
Investing.com – Discovery (NASDAQ:DISCA) shares were up more than 16% in Monday’s premarket after AT&T (NYSE:T) confirmed reports it will spin off its media assets and merge them with the company behind TLC and Animal Planet.
AT&T shares were up too, rising more than 4%.
The merger of AT&T’s WarnerMedia unit with Discovery will create a new streaming giant with a market value of around $150 billion, according to various reports.
WarnerMedia houses HBO, CNN and the Warner Brothers movie studio and accounts for nearly half of AT&T’s $230 billion market capitalization.
Discovery’s unscripted cooking and home refurbishment shows account for a large part of its $18 billion market valuation.
Parting with media assets underscores AT&T’s struggles as it tries to cut its debt of $169 billion and strengthen its 5G network.
The deal could give Discovery ammunition to take on the likes of Netflix (NASDAQ:NFLX) and Walt Disney (NYSE:DIS) in the booming streaming business.