Warner Bros Discovery has agreed to be acquired by Paramount Skydance in a $110 billion deal, ending a high-stakes bidding struggle after Netflix walked away from its settlement with the HBO Max proprietor.
The deal, with an fairness worth of $81 billion, is anticipated to shut within the third quarter of 2026, the businesses stated on Friday. Reuters first reported on Warner Bros Discovery and Paramount signing a deal earlier within the day, citing an audio clip of a world townhall held by the corporate.
The merger would create a media powerhouse, combining main studios and networks comparable to CNN and CBS to compete extra aggressively, as streaming has upended the trade by drawing audiences away from conventional linear TV.
The mixed firm will boast a movie library of over 15,000 titles and well-liked franchises comparable to “Recreation of Thrones,” “Mission Unimaginable,” “Harry Potter,” and the DC Universe, the businesses stated in a press release.
Netflix on Thursday declined to match Paramount’s newest $31-per-share provide, which Warner Bros deemed superior to the streaming pioneer’s $27.75-per-share settlement for its studio and streaming property.
Warner Bros acquired the contracts from Paramount on Saturday and inside the following two days on continuous negotiation, it concluded that Paramount’s provide was superior, in line with a supply acquainted with negotiations.
Warner Bros didn’t instantly reply to a Reuters request for remark.
Shares of Paramount had been up round 3% in prolonged buying and selling, whereas these of Netflix had been down 1%.
Warner Bros shareholders are anticipated to vote on the proposed merger in early spring of 2026, the businesses stated.
The acquisition will likely be funded by $47 billion in fairness from the Ellison Household and RedBird Capital Companions, with further debt commitments of $54 billion from Financial institution of America, Citigroup and Apollo. Paramount additionally plans a rights providing of as much as $3.25 billion of Class B inventory for current shareholders.
Paramount and Warner Bros stated they count on greater than $6 billion in financial savings, pushed by expertise integration, company efficiencies and streamlining operations.
Whereas Paramount has gained the bidding struggle for Warner Bros Discovery, the merger has drawn scrutiny. California regulators are making ready a vigorous evaluate of the $110 billion deal, which might reshape Hollywood.
Paramount, led by billionaire Larry Ellison’s son David Ellison, has deep political connections to the Trump administration, which might assist it to get extra favorable therapy, some analysts have stated.
California State Lawyer Basic Rob Bonta stated on Thursday that California is already investigating the deal and will likely be “vigorous” in its evaluate.
Paramount has been in pursuit of Warner Bros since late final yr when it launched a hostile marketing campaign to wrest the corporate from the streaming large by persistently elevating its provide.
The corporate, led by billionaire Larry Ellison’s son David Ellison, enticed Warner’s board again to the bargaining desk by elevating the opportunity of an improved money provide.
In its revised bid, Paramount raised the termination price it might pay ought to the deal fail to realize regulatory approval to $7 billion from $5.8 billion.
Paramount paid the $2.80 billion termination price that Warner Bros owed Netflix, the streaming large stated in a regulatory submitting on Friday.
“Netflix is the largest winner within the Warner Bros Discovery sweepstakes. Netflix earns a termination price paid by Paramount. By driving a bidding struggle, Netflix raised the worth Paramount needed to pay, which is able to in the end burden Paramount-WBD with extra debt,” Emarketer analyst Ross Benes stated.
‘EU ANTITRUST APPROVAL LIKELY NOT A HURDLE’
Paramount is anticipated to simply win European Union antitrust approval, with any required divestments more likely to be minor, Reuters reported on Friday, citing sources.
The deal is amongst Hollywood’s greatest media shake-ups and can create one of many largest movie studios on the earth, permitting Paramount to faucet Warner’s trove of mental property, together with franchises comparable to “Incredible Beasts” and “The Matrix”.
The brand new firm has pledged to take care of each studios, and produce a minimal of 30 theatrical movies yearly.
Lawmakers on each side of the political aisle have, nevertheless, raised considerations that any deal to accumulate Warner Bros might lead to fewer selections and better costs for shoppers.
Cinema operators are additionally involved that combining massive Hollywood studios might price jobs and scale back the variety of films launched in theaters.
“The lack of competitors can be a catastrophe for writers, shoppers and all the leisure trade. This merger have to be blocked,” the Writers Guild of America, a union representing 1000’s of tv and movie writers together with different media employees, stated in a press release.