• The merger could create an entertainment industry giant that rivals Netflix and Disney
  • The deal could be announced as early as Monday
  • The merger would have an estimated enterprise value of $150 billion

AT&T is reportedly in advance talks to merge its media businesses with Discovery Inc. in an aim to rival streaming giants Netflix and Disney, people familiar with the matter revealed Sunday.

The deal would merge AT&T’s WarnerMedia assets, including HBO and Warner Bros., with Discovery. The outcome will likely become a new publicly-traded company co-owned by both companies, sources briefed on the deal told CNBC.

The deal could create a new entertainment industry giant to take on rival popular streaming services offered by Netflix and Disney.

The talks have not been finalized. The deal could be announced as soon as Monday and would have an estimated $150 billion in enterprise value, according to the Financial Times.

AT&T and Discovery are two of the largest media businesses in the United States. The phone company acquired Time Warner, since renamed WarnerMedia, in June 2018 for $85 billion in equity value.

“We’re going to bring a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors and advertisers,” Randall L. Stephenson, AT&T’s chairman and chief executive, said in a statement following the 2018 acquisition.

WarnerMedia is being run by Jason Kilar, the first chief executive of Hulu and one of the pioneers of streaming services.

AT&T has vast entertainment and media assets, including CNN, HBO, HBO Max, TBS, TNT and Warner Bros. It also has the rights to film valuable franchises, including “Harry Potter.”

When the phone company launched HBO and HBO Max in 2020, the streaming platforms gained a total of 44.2 million subscribers in the first quarter. In comparison, Disney Plus gained 103 million subscribers and Netflix got 207 million subscribers, according to CNET.

Discovery Inc., which has a $16 billion market capitalization and a $30 billion enterprise value, also has an impressive line-up of cable channels. This includes Animal Planet, the Food Network, HGTV and Oprah Winfrey’s OWN. The company is also known for producing hit reality shows, such as “90 Day Fiance” and “Diners, Drive-Ins and Dives.”

Discovery is currently operating a streaming service that reaches 15 million subscribers worldwide. It also has niche services, including Eurosport Player and Food Network Kitchen.

View of AT&T communications company building in Mexico City on Dec. 3, 2018. OMAR TORRES/AFP/Getty Images