Paramount finalizes $111 billion Warner Bros. Discovery acquisition
Paramount closes Warner Bros. Discovery transaction
Paramount completed its $111 billion acquisition of Warner Bros. Discovery on October 6, ending a contested sale process that had drawn bids from Netflix and interest from other major media groups. The transaction includes Warner Bros. Discovery’s studios, HBO, streaming platforms, games business and television networks including CNN and HGTV.
Netflix had announced in December that it would acquire Warner Bros. Discovery’s studios and streaming assets for $82.7 billion. Paramount ultimately prevailed with a proposal for all of WBD’s assets, raising its offer to $31 per share in February. Netflix declined to match that price and withdrew from negotiations.
The combined corporation has been renamed Skydance and is expected to generate almost $70 billion in annual revenue. Paramount+, HBO Max and Discovery+ are set to be combined eventually, reshaping the company’s streaming portfolio.
Debt and financing remained central to the contest
Warner Bros. Discovery had been exploring a sale after facing billions of dollars in debt, declining cable audiences and strong streaming competition. Paramount’s earlier proposals were rejected by WBD’s board, which cited the bidder’s debt load and concerns around the investors supporting its proposal.
Under the final agreement, Paramount is assuming approximately $33 billion of Warner Bros. Discovery debt. The deal is backed by a $54 billion debt commitment from Bank of America, Merrill Lynch, Citi and Apollo Global Management, alongside $45.7 billion in equity from Larry Ellison. The board had said an earlier structure would have left the combined business with $87 billion in debt.
Paramount also sought to improve the attractiveness of its offer by promising WBD shareholders a $0.25-per-share ticking fee for every quarter the transaction did not close after December 31, 2026. It said it would pay the $2.8 billion breakup fee if Warner abandoned its Netflix agreement.
Regulatory review and legal challenge
The merger faced scrutiny from lawmakers and state officials concerned about competition, consumer prices and the effects on theaters, cable distributors and viewers. California Attorney General Rob Bonta said in February that the California Department of Justice had an open investigation and intended to conduct a vigorous review.
For the sequence of state action, the 12-state attorneys general legal challenge details the 12-attorney-general challenge that temporarily halted the transaction after federal approval. The U.S. Department of Justice approved the acquisition in June, but the coalition filed suit on July 13. U.S. District Judge Araceli Martínez-Olguín then issued a 14-day pause before a judge approved the deal in late September.
David Ellison has also warned of significant job reductions, adding to concerns about employment and wages. Questions about editorial independence at news operations have been raised by Warner-owned CNN employees following scrutiny of critical reporting at CBS News under Ellison’s Paramount ownership.
What businesses should watch
The completed acquisition creates a media group spanning film and television production, news, cable networks, games and several streaming brands. Businesses that buy advertising, license content or distribute media should monitor the planned streaming consolidation and the combined company’s commercial decisions when assessing future partners, inventory and subscription options.