Paramount Acquires Warner Bros. Discovery in Billion-Dollar Deal
In a flurry of hundred-billion-dollar-deal offers, the bidding war for Warner Bros. Discovery has come to an end. Paramount, owned by David Ellison, will acquire Warner Bros. Discovery in a landmark deal.
On Thursday, Warner Bros. Discovery announced that Paramount Skydance’s latest offer of $31 a share was deemed a “superior proposal,” prompting Netflix to walk away from the deal. Netflix had initially bid $82.7 billion in an all-cash offer for the legacy studio but decided not to match Paramount’s revised bid.
Netflix co-CEOs Ted Sarandos and Greg Peters stated, “The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. However, at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid.”
As part of the new agreement, Warner Bros. Discovery will pay a $2.8 billion termination fee to Netflix to end the existing deal. Paramount’s renewed offer, backed by Larry Ellison, includes covering this breakup fee.
The acquisition will see Paramount acquiring the entirety of Warner Bros. Discovery, including its studios, HBO, streaming service, games and entertainment divisions, and linear television networks like CNN, TBS, TNT, Discovery, and HGTV.
Paramount’s ownership of news network CBS has raised concerns about potential job cuts and editorial influence. Larry Ellison’s support for President Trump has also sparked controversy within the media industry.
Netflix’s initial bid for Warner Bros. Discovery was nearly $83 billion, focusing on the studios and streaming service. Despite Paramount’s aggressive takeover attempts, Warner Bros. Discovery had originally favored Netflix’s offer over Paramount’s higher bid for the full company.
Paramount will inherit Warner Bros. Discovery’s $33 billion debt as part of the acquisition. Larry Ellison, with a net worth of $201 billion, is set to provide additional equity to support Paramount’s bid. The deal is also backed by a $57.5 billion debt commitment from Bank of America Merrill Lynch, Citi, and Apollo Global Management.
Following the announcement, Netflix shares surged by 10% in after-hours trading, while Paramount’s stock rose by 4.5%.
