AT&T, the wireless carrier that thundered its way into the media business three years ago with grand visions of streaming video on millions of its customers’ cellphones, has agreed to spin off its WarnerMedia group and merge it with its rival programmer Discovery Inc, the companies announced on Monday.

The $43-billion transaction will combine HBO, Warner Bros studios, CNN and several other cable networks with a host of reality-based cable channels from Discovery, including Oprah Winfrey’s OWN, HGTV, The Food Network and Animal Planet.


                                              


The company will join together two of the largest media businesses in the country. AT&T’s WarnerMedia group includes the sports-heavy cable networks TNT and TBS. In addition to Discovery’s strong lineup of reality-based cable channels, the company has a large international sports business.

The merger would also be a significant about-face for AT&T, a telecommunications giant better known for servicing fiber lines and cell towers than producing entertainment and courting Hollywood.

Industry experts questioned AT&T’s daring $85-billion purchase of Time Warner at a time cord-cutting was only accelerating. The spinoff indicates a failed acquisition strategy.

WarnerMedia is run by Jason Kilar, 50, one of the early pioneers of streaming and the first chief executive of Hulu. Discovery has been led for 14 years by David Zaslav, 60, who helped it grow into a reality behemoth. Zaslav will lead the new business.

The companies said they expected the deal, which must be approved by Discovery shareholders and regulators, to be finalised in the middle of next year. The companies anticipate they will cut annual costs by $3 billion as a result of the transaction.