Warner Bros. Discovery announced Monday that it will split into two companies by separating its studios and streaming business from its cable TV networks.
The parent company of HBO and CNN is splitting into two firms to help it better compete in streaming, as the move is expected to give WBD’s streaming unit more room to scale up its content production without being weighed down by the declining cable networks within the company.
Warner Bros. Discovery CEO David Zaslav will lead the streaming and studios business after the split, while CFO Gunnar Wiedenfels will lead the global networks unit. 
“By operating as two distinct and optimized companies in the future, we are empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today’s evolving media landscape,” Zaslav said.
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The corporate split comes a few years after the 2022 merger of WarnerMedia and Discovery and will be structured as a tax-free transaction, which is expected to be completed by mid-2026.
WBD shares climbed 8% during morning trading.
The company laid the groundwork for a potential sale or spinoff of its cable TV assets in December, when it announced a separation of its streaming and studio operations.
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The split will align the company with Comcast, which is spinning off most of its cable TV networks.
Bank of America research analyst Jessica Reif Ehrlich said Warner Bros. Discovery’s cable TV assets are a “very logical partner” for Comcast’s new spinoff company.
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WBD also on Monday launched tender offers to restructure its existing debt, which is funded by a $17.5 billion bridge facility provided by JPMorgan.
The bridge loan is expected to be refinanced before the planned separation and the company added that the global networks division will retain up to a 20% stake in streaming and studios, which it plans to monetize to further reduce its debt.
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JPMorgan and Evercore are advising WBD on the deal, while Kirkland & Ellis are serving as legal counsel.
Reuters contributed to this report.
