US telecoms giant AT&T is to spin off its media assets including Game of Thrones maker HBO in a $43bn deal with lifestyle TV company Discovery.

The deal will create a standalone business which will also include AT&T’s Warner Bros film studios – maker of the Batman and Harry Potter franchises – and CNN – to compete in the global streaming market against the likes of Netflix.

They will be combined in a single company with Discovery’s stable of home, cooking, science and nature shows and sport channel Eurosport.

The deal will see AT&T receive $43bn via cash and debt while its shareholders will end up owning stock representing 71% of the new company, which will be led by Discovery boss David Zaslav.

It will compete with the likes of Netflix, Apple, Amazon, Disney and Comcast – which is the US owner of Sky News parent company Sky.

AT&T already operates streaming service HBO Max while Discovery earlier this year launched its discovery+ service.

AT&T chief executive John Stankey said: “This agreement unites two entertainment leaders with complementary content strengths and positions the new company to be one of the leading global direct-to-consumer streaming platforms.

“It will support the fantastic growth and international launch of HBO Max with Discovery’s global footprint and create efficiencies which can be re-invested in producing more great content to give consumers what they want.”

AT&T said the business would have a content library of nearly 200,000 hours of “iconic programming” bringing together the likes of HBO, Warner Bros, Discovery, DC Comics, CNN, Cartoon Network, HGTV, Food Network, and Eurosport.

The deal, expected to complete next year pending approval by Discovery’s shareholders, marks the unwinding of AT&T’s ambitions to create a media and telecoms powerhouse with the acquisition of US media conglomerate TimeWarner in 2018 for more than $80bn.

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