Warner Bros. Discovery (WBD) has agreed to a $110 billion merger with Paramount Skydance, bringing an end to the bidding war with Netflix for control of the sprawling media empire.
Valuing the company at roughly $81 billion, Paramount will pay $31.00 per share in cash for all of WBD’s outstanding shares to acquire Warner Bros.’ film studio, the HBO Max streaming platform, and a portfolio of cable networks, including CNN, Eurosport and TNT Sports.
“By bringing together these world-class studios, our complementary streaming platforms, and the extraordinary talent behind them, we will create even greater value for audiences, partners and shareholders — and we couldn’t be more excited for what’s ahead,” David Ellison, Chairman and CEO of Paramount, said in a statement.
The President and CEO of Warner Bros. Discovery, David Zaslav, described the deal as “historic” and expressed satisfaction with the results delivered for WBD shareholders and the entertainment industry.
“Our guiding principle throughout this process has been to secure a transaction that maximizes the value of our iconic assets and our century-old studio while delivering as much certainty as possible for our investors,” he added.
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Netflix bows out of the race
Paramount ultimately prevailed as the winner in the months-long bidding war with the streaming giant Netflix, which offered $27.75 per share and refused to match Paramount’s bid as “the deal is no longer financially attractive”.
Netflix co-chief executives Ted Sarandos and Greg Peters said the takeover would have created shareholder value and a strong prospect of regulatory approval, but the “transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price”.
The total equity value of the merger — including Warner Bros.’ outstanding debt — surpasses $110 billion, making it one of the largest and most significant mergers in Hollywood.
The deal, which received the approval of the Board of Directors of both companies, is expected to close by the third quarter of 2026, “subject to customary closing conditions, including regulatory clearances and approval by WBD shareholders”.
Under the agreement, if the transaction is not completed by 30 September 2026, WBD shareholders will receive a quarterly payment of $0.25 per share as a “ticketing fee” until the deal is finalised.
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US regulators pledge to scrutinise the deal
Democratic lawmakers, however, voiced doubts about the merger’s prospects and vowed to rigorously scrutinise the deal, which includes a $7 billion reverse termination fee if the necessary approval is not secured.
“These two Hollywood titans have not cleared regulatory scrutiny — the California Department of Justice has an open investigation, and we intend to be vigorous in our review,” California Attorney General Rob Bonta said.
Massachusetts Senator Elizabeth Warren defined the merger as “an antitrust disaster”, claiming it will inevitably lead to higher prices and will threaten the freedom of choice of the American public.
Despite the legal uncertainty at home, Paramount’s COO and Chief Strategy Officer, Andy Gordon, announced the company is making progress in “securing regulatory clearances globally”.
He confirmed that the Foreign Direct Investment (FDI) authorities in Germany and Slovenia approved the merger, although the European Commission has still not been formally notified of the acquisition.
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Merger creates one of the largest film studios worldwide
The merger between Paramount and Warner Bros. would create a media powerhouse and one of the largest film studios in the world with a library of over 15,000 titles.
The new entity would not only have CNN and CBS in its network portfolio but will also acquire the intellectual property rights over lucrative franchises such as “Harry Potter”, “Game of Thrones”, “Mission Impossible”, “Lord of the Rings”, the “DC Universe” and many more.
According to a press release, the new entity vows to produce at least 30 films annually while “attracting and retaining the industry’s leading creative talent [and] expanding the supply of high-quality content for both the combined company’s platforms”.
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