UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): May 20, 2021 (
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| Item 1.01 | Entry into a Material Definitive Agreement. |
As previously disclosed in a Current Report on Form 8-K filed by AT&T Inc. (the “Company”) with the Securities and Exchange Commission (the “SEC”) on May 17, 2021, the Company and Magallanes, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Spinco”), entered into certain definitive agreements on May 17, 2021 with Discovery, Inc., a Delaware corporation (“Discovery”), and Drake Subsidiary, Inc., a Delaware corporation and wholly owned subsidiary of Discovery (“Merger Sub”).
The definitive agreements entered into in connection with the transactions (collectively, the “Transaction Agreements”) include:
| • | an Agreement and Plan of Merger, dated May 17, 2021 (the “Merger Agreement”), by and among the Company, Spinco, Discovery and Merger Sub; |
| • | a Separation and Distribution Agreement, dated May 17, 2021 (the “Separation Agreement”), by and among the Company, Spinco and Discovery; |
| • | a Voting Agreement, dated May 17, 2021 (the “Malone Voting Agreement”), by and among the Company, John C. Malone and the stockholders parties thereto; |
| • | a Voting Agreement, dated May 17, 2021 (the “A/N Voting Agreement”, and together with the Malone Voting Agreement, the “Voting Agreements”), by and among AT&T Inc., Advance/Newhouse Programming Partnership and Advance/Newhouse Partnership; |
| • | an Employee Matters Agreement, dated May 17, 2021 (the “Employee Matters Agreement”), by and among the Company, Spinco, and Discovery, which governs the parties’ respective obligations with respect to current and former employees of the WarnerMedia business and certain other employee compensation and benefits matters relating to the transaction, including, without limitation, the treatment of the Company’s outstanding equity awards as of the closing; |
| • | a Tax Matters Agreement, dated May 17, 2021 (the “Tax Matters Agreement”), by and among the Company, Spinco, and Discovery, which governs the parties’ respective rights, responsibilities and obligations with respect to taxes, tax attributes, the preparation and filing of tax returns, responsibility for and preservation of the expected tax-free status of the transactions contemplated by the Merger Agreement and the Separation Agreement, and certain other tax matters, and which includes a “Tax Receivable Annex,” pursuant to which the Company is generally entitled to 85% of the cash tax savings, if any, arising from certain tax basis increases that may result from the transactions. |
A summary of the material terms and conditions of each of the Merger Agreement, the Separation Agreement and the Voting Agreements is included the Current Report on Form 8-K filed by the Company with the SEC on May 17, 2021, which summaries are incorporated herein by reference. The descriptions of the Transaction Agreements and the transactions contemplated thereby do not purport to be complete and are subject to, and qualified in their entirety by reference to, the full text of the Transaction Agreements, copies of which are attached hereto as Exhibit 2.1, Exhibit 2.2, Exhibit 10.1, Exhibit 10.2, Exhibit 10.3 and Exhibit 10.4, respectively, which are incorporated herein by reference.
The Transactions Agreements have been included to provide investors with information regarding their terms. They are not intended to provide any financial or other factual information about the Company, Spinco or Discovery. The representations, warranties, covenants and agreements contained in the Transaction Agreements (1) were made only for purposes of the Transaction Agreements, as of the specific dates therein, (2) were solely for the benefit of the parties to the Transaction Agreements and the parties expressly identified as third-party beneficiaries thereto, as applicable (except as expressly provided therein), (3) may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Transaction Agreements instead of establishing these matters as facts, and (4) may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under the Transaction Agreements and should not rely on the representations, warranties, covenants and agreements therein or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective subsidiaries or affiliates. Moreover, information concerning the subject matter of representations and warranties may change after the respective dates of the Transaction Agreements, which subsequent information may or may not be fully reflected in the respective public disclosures by the Company, Discovery and Spinco. Accordingly, investors should read the Transaction Agreements not in isolation but in conjunction with the other information about the Company, Discovery and Spinco and their respective subsidiaries that the respective companies include in reports, statements and other filings they make with the SEC.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits
| * | Certain schedules (or similar attachments) have been omitted pursuant to Item 601(a)(5) or Item 601(b)(2) of Regulation S-K. The registrant agrees to furnish copies of such schedules (or similar attachments) to the U.S. Securities and Exchange Commission upon request. |
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| AT&T INC. | ||||||
| Date: May 20, 2021 | By: | /s/ Pascal Desroches | ||||
| Pascal Desroches | ||||||
| Senior Executive Vice President and Chief Financial Officer | ||||||