The IRS Gives the WarnerMedia-Discovery Merger a Favorable Rating

AT&T Inc. was given a “favorable” ruling by the Internal Revenue Service for the planned merger of its entertainment company WarnerMedia with television conglomerate Discovery Inc.
 
The Dallas-based telecommunications company reported the ruling in a regulatory filing released Dec. 29. After announcing the deal in May, the companies began a multistep process known as a Reverse Morris Trust, which enables AT&T and its partner to complete the process without incurring capital gains taxes.
 
“On Dec. 28, 2021, the company received a favorable private letter ruling from the IRS regarding the qualification of the contribution of the WarnerMedia business to SpinCo pursuant to the separation, the distribution and certain related transactions for their intended tax treatments,” AT&T reported in the filing.

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