AT&T Inc. won a “favorable” ruling from the Internal Revenue Service for the planned merger of its entertainment company WarnerMedia with television conglomerate Discovery Inc.
AT&T and Discovery each reported the ruling in a regulatory filing dated December 29.
After announcing the deal in May, the companies began a Reverse Morris Trust, enabling AT&T and its partner to complete the process without incurring capital gains taxes.
AT&T looks to separate WarnerMedia from its other holdings for the merger with New York-based Discovery.
As per the merger terms, AT&T stockholders will control 71 percent of the new company, and Discovery’s stockholders will own the other 29 percent.
By Anusuya Lahiri
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