Paramount Skydance announced Friday that it will acquire Warner Bros. Discovery in a landmark deal valuing the combined entity at $110 billion, concluding a five-month bidding war in which it ultimately outpaced Netflix.
The agreement, unanimously approved by both companies’ boards, is expected to close in the third quarter of 2026.
The merger will create one of the world’s largest entertainment companies, combining major media assets including CNN, CBS, HBO and Nickelodeon, alongside blockbuster franchises such as Harry Potter, Game of Thrones, the DC Universe, Mission: Impossible and SpongeBob SquarePants.
Under the terms of the agreement, Paramount will pay $31.00 per share in cash for all outstanding Warner Bros. Discovery shares, implying an equity valuation of $81 billion. Including the debt Paramount will assume, the total transaction value reaches $110 billion.
“Our pursuit of Warner Bros. Discovery has been guided by a clear purpose: to honor the legacy of two iconic companies while accelerating our vision of building a next-generation media and entertainment company,” Paramount chairman and CEO David Ellison said in a statement.
The deal follows Netflix’s decision to withdraw from the contest on Thursday, declining to match Paramount’s final offer.
Regulatory Scrutiny Ahead
Investor reaction was swift. Paramount shares surged more than 20 percent on Friday, while Netflix gained nearly 14 percent, with some analysts suggesting the streamer benefited from avoiding a costly acquisition.
“Netflix’s withdrawal from the race will leave it free to refocus on its business, while its closest competitors grapple with long and distracting regulatory approval and merger integration processes,” said HSBC analyst Mohammed Khallouf.
Attention is now turning to the Ellison family, which will assume control of the expanded media empire. If regulators approve the deal, David Ellison is widely expected to implement cost-cutting measures to manage the significant debt burden associated with the acquisition.
The takeover was largely financed by Larry Ellison, co-founder of Oracle and one of the world’s wealthiest individuals. His financial backing reportedly helped secure Warner Bros. Discovery’s board approval. Larry Ellison is also a longtime ally of US President Donald Trump, who has indicated he would review the deal. Both Paramount and Netflix had sought to engage the White House during the bidding process.
Despite board approvals, the merger faces significant regulatory hurdles. The European Commission is reviewing the transaction, as are several US states, including California.
“Paramount/Warner Bros is not a done deal,” California Attorney General Rob Bonta said Friday.
The financing package also includes backing from sovereign wealth funds in Saudi Arabia, Qatar and Abu Dhabi — a factor that could intensify scrutiny over national security considerations.
Paramount has agreed to pay a $7 billion regulatory termination fee if the transaction fails to close due to regulatory barriers. It has also covered the $2.8 billion breakup fee that Warner Bros. Discovery owed Netflix following the collapse of their prior agreement.
The proposed merger is poised to reshape the global media landscape, pending regulatory approval in the United States and abroad.
AFP
