Snippet: Was This $100 Billion Deal the Worst Merger Ever? ☇

Shared on November 20, 2022

James B. Stewart for The New York Times:

Less than four years after the merger, AT&T abandoned its grand initiative. It spun off its Warner Media assets and ceded management control to Discovery. The new company, Warner Bros. Discovery, took on $43 billion of AT&T’s debt, and AT&T shareholders kept 71 percent of the company, a stake worth less than $20 billion. That amounts to a loss of about $47 billion for AT&T shareholders, based on AT&T’s $109 billion valuation of the deal at the time it was announced.

An AT&T spokesman, Fletcher Cook, took issue with that calculation. He said that the value of the deal at closing was $100.3 billion, and that The Times’s analysis failed to account for the sale of Warner assets and cash flows generated while AT&T owned Warner Media. “Under any informed measure, our ownership of Warner Media was accretive,” he said.

Say what you will about the current state of Twitter being a dumpster fire that will probably be studied in business courses for years to come, but AT&T’s 2010s are filled with more hubris and poor decision-making and it just kept going.

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