Warner Bros. Discovery (NASDAQ: WBD) has announced plans to separate into two publicly traded companies, with the aim of maximizing their potential. The streaming & studios company, which will include Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, and HBO Max, will be led by David Zaslav, the current president and CEO of Warner Bros. Discovery. Gunnar Wiedenfels, the current CFO of Warner Bros. Discovery, will serve as president and CEO of Global Networks.
The planned separation is expected to unlock value for shareholders and create opportunities for both new businesses to thrive. The separation will enable each company to pursue opportunities that strengthen their competitive positions, form world-class management teams, and attract a shareholder base aligned with its growth prospects and financial profiles.
The streaming & studios company, with best-in-class creative capabilities and an unmatched library of beloved intellectual property, will focus on scaling HBO Max, investing in HBO's programming, and prioritizing the studios' operating principles. The company is on a path back to its target of at least $3 billion in annual adjusted EBITDA.
Global Networks will encompass a powerful global portfolio of entertainment, sports, and news television networks and brands, as well as their digital products. The company reaches 1.1 billion unique viewers in 68 languages across 200 countries and territories and operates with industry-leading margins and robust free cash flow conversion.
Warner Bros. Discovery intends to separate the businesses in a tax-free manner for U.S. federal income tax purposes. The companies plan to implement arm's length transition services and commercial agreements post-separation to facilitate the transition and maintain continued operational efficiencies.
The separation is expected to be completed by mid-2026, subject to closing and other conditions, including final approval by the Warner Bros. Discovery board, receipt of tax opinions and/or a private letter ruling from the Internal Revenue Service, and market conditions. J.P. Morgan and Evercore are serving as financial advisors to Warner Bros. Discovery, and Kirkland & Ellis LLP is serving as legal counsel.
The planned separation reflects the company's ongoing efforts to evaluate and pursue opportunities that enhance shareholder value, building on the achievements realized over the past three years. The market has reacted to these announcements by moving the company's shares -2.8% to a price of $9.545. For more information, read the company's full 8-K submission here.
