AT&T CEO John Stankey said the company is working closely with regulators on the WarnerMedia-Discovery deal announced in late May and so far hasn’t seen anything “that’s been particularly problematic” in the review process.
“No news is good news,” he said on a conference call to discuss the telecom and broadband giant’s quarterly earnings. “We’re basically tracking through the process, as we would expect to do. Right now it’s a lot of wok with the regulatory agencies and [producing] documentation and information and all that is underway.”
He still expects approval will take a full year with a green light in 2022. “I don’t have any reason to suggest it is going to be any different than that,” he said in response to a question. The deal hasn’t helped the stock price of either company (AT&T shares are off slightly in early trade Thursday) in part on the long lead time, which ends up being a bit of an anticlimax in such a fast moving media landscape.
AT&T Adds 2.8M HBO And HBO Max Subscribers In Q2, Smashes Wall Street Forecasts
An earlier deal inked late last year for DirecTV, however, will close earlier than anticipated — over the next several weeks sometime in early August, he said, calling it a “pleasant surprise” how quickly it moved ahead. Some 30% of the satellite broadcaster was turned over to TGP to create separate, standalone entity.
He called WarnerMedia-Discovery proposition pretty “straightforward” “If we were to be surprised and it closes sooner we will take it and be prepared for it.”
The speed of another recent combination — Amazon’s proposed acquisition of MGM — has been called into question by news that the FTC is probing the deal.
AT&T company is shrinking by the day as it unloads assets and unwinds major acquisitions to re-focus on its core business lines.
It will become a smaller company when DirecTV separates. Assuming an imminent close, it outlined the expected impact of the deal on financials for the remainder of 2021: Revenues to be lower by $9 billion; EBITDA to be lower by $1 billion; free cash flow to be lower by about $1 billion, equating to $26 billion for the year.
No change is expected to updated adjusted EPS and capital investment guidance.
AT&T expects proceeds of about $7.8 billion at close of the DirecTV transaction, and annual cash distributions of more than $1 billion.