When WarnerMedia and Discovery Inc. merged back in 2022, the rationale was that the combination would put the companies in a better position to compete against Netflix, Disney and others that were diving head first into streaming and navigate what Warner Bros.

Hollywood conglomerate Warner Bros. Discovery on Monday made it official, unveiling plans to separate the company, in a tax-free transaction, into two publicly traded companies, “enabling each to maximize its potential.”

Warner Bros. Discovery plans to separate into two public companies by next year as it makes a clearer split between its streaming and cable businesses. Warner Bros.