AT&T Inc's (NYSE: T) board decided to spin off AT&T's interest in WarnerMedia in connection with the previously announced transaction with Discovery Inc (NASDAQ: DISCA).
The transaction, which will spin off 100% of AT&T's interest in WarnerMedia to AT&T's existing shareholders in a pro-rata distribution, followed by the merger of WarnerMedia with Discovery, will likely close in the second quarter of 2022.
Related Content: AT&T And Discovery Confirm B Media Merger: What You Need To Know
Additionally, AT&T's board approved an expected post-close annual dividend of $1.11 per AT&T share or ~$8 billion.
AT&T lowered its dividend payout ratio to 40% of cash flow.
AT&T had initially planned to pay a 40% - 43% ratio, or ~$9 billion, Bloomberg reports. Before the deal, AT&T's dividend was $2.08 a share, or ~$15 billion.
As previously disclosed, AT&T will receive $43 billion, and AT&T's shareholders will receive stock representing 71% of the new company, Warner Bros. Discovery, Inc (WBD). Existing Discovery shareholders will own 29% of the new company.
Price Action: T shares traded lower by 4.85% at $24.26 in the market session on the last check Tuesday. DISCA shares traded lower by 1.97% at $27.35.
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