AT&T (T  ) and Discovery Communications (DISCA  ) are spinning off and merging their respective media assets, creating a new, publicly-traded company. The divestment isn't surprising, considering the high cost of AT&T's attempt to dabble in media.

The divestment comes after a string of costly failures for the telecom giant, all under the behest of former CEO Randall Stephenson. Under Stephenson, AT&T attempted to acquire T-Mobile (TMUS  ), DirectTV, and WarnerMedia, with the former ventures helping to put AT&T atop a mountain of debt costing over $170 million.

As part of the deal, AT&T will shed $43 billion of said debt, with the resulting company formed by the deal inheriting it. AT&T shareholders will control 71% of the resulting company, while Discovery shareholders will control the remaining 29%. AT&T is also looking to adjust its dividend ratio, reducing it by nearly half to reflect the reduced size of the company. Investors, however, didn't appear to be too bothered by the prospect.

The slimming down of AT&T began last year when the company offloaded DirectTV in a deal with private equity company TPG. The transaction was a sore one for AT&T, which offloaded DirectTV for roughly 1/3 of what it had acquired the cable company for just a few years ago.

Spinning off WarnerMedia also fulfills a request made by hedge fund Elliott Management, which retains a stake in the telecom firm. Despite previously being at odds with AT&T over the acquisition of WarnerMedia, the fund struck a more supportive tone once Stephenson's successor, John Stankey, agreed to address the fund's complaints. According to the firm, the divestment of WarnerMedia "fulfills" the company's promise to its investors.

AT&T investors appeared to be pretty receptive to the announcement, driving shares up 4.6% during early trading on Monday. AT&T was unable to maintain a positive trend for long, however, with shares tumbling 8.4% by market close on Tuesday. Discovery shares shot up 10% on Monday in a pre-market rush but were similarly unable to maintain a positive trend, declining 6.6% by Tuesday close.