AT&T Inc. T, -4.88% said Tuesday it has decided to spin off its stake in WarnerMedia in connection with the previously announced deal with Discovery Inc. DISCA, -6.45% and will conduct the transaction through a pro rata distribution to shareholders after merging WarnerMedia with Discovery. The deal is expected to close in the second quarter. AT&T shareholders will receive 0.24 share of the new Warner Bros. Discovery stock for each share owned. Warner Bros. Discovery will be listed on Nasdaq under the ticker symbol “WBD.” AT&T shareholders will own about 71% of WBD. The board has also approved a post-close annual dividend of $1.11 per AT&T share, down from $2.08 previously, which it said will still make it one of the highest dividend yields in Corporate America, and to size the annual dividend payout at about 40% of projected free cash flow to give it leeway to invest in growth opportunities. “No action is required by AT&T’s shareholders to receive shares of WBD common stock in the merger, when it occurs,” AT&T said in a statement. Proceeds of the deal will be used to deleverage. AT&T shares were down 6% premarket and have fallen 11% in the last 12 months, while the S&P 500 SPX, +0.01% has gained 19.7%.