Zürcher Nachrichten - Paramount acquires Warner Bros. in $110 bn mega-merger

The agreement ends a five-month saga and creates an entertainment behemoth whose impact on a struggling media landscape -- and connections to Donald Trump's White House -- will be closely scrutinized.

The merged entity will include CNN, CBS, HBO and Nickelodeon as well as some of Hollywood's most valuable franchises, including 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. shares, implying an equity value of $81 billion -- and $110 billion when including the mountain of debt Paramount will take on.

The transaction has been unanimously approved by both companies' boards and is expected to close in the third quarter of 2026, the companies said.

"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," said Paramount chairman and CEO David Ellison.

The deal closes a battle that ended Thursday when Netflix walked away, unwilling to match Paramount's latest offer.

- Regulatory hurdles ahead -

Wall Street praised the deal, with shares of Paramount up more than 20 percent Friday. Simultaneously, Netflix was up nearly 14 percent, as many investors concluded the fight had not been worth it for the streamer.

"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.

Questions now pivot to the Ellison family, which will control a constellation of media properties spanning the globe -- though at the cost of accumulating a pile of debt.

If regulators approve the deal, David Ellison is widely expected to embark on a painful round of cost-cutting to pare down the load.

His father, Oracle billionaire Larry Ellison, one of the world's richest men, largely financed the takeover, offering a financial guarantee that finally persuaded the Warner Bros. board.

Larry Ellison is also a longtime ally of President Donald Trump, who said he would weigh in on the deal. Both Paramount and Netflix sought to curry favor with the White House, with Paramount winning out.

The deal still faces regulatory hurdles. The European Commission is reviewing the merger, as are several US states, including California.

"Paramount/Warner Bros is not a done deal," California Attorney General Rob Bonta said Friday.

The Paramount offer includes financing from three Middle Eastern sovereign wealth funds -- those of Saudi Arabia, Qatar and Abu Dhabi -- which could also attract extra scrutiny on national security concerns.

Paramount has offered a $7 billion regulatory termination fee should the deal fail to close on regulatory grounds, and has covered the $2.8 billion breakup fee Warner Bros. Discovery owed Netflix when it walked away from their agreement.

R.Schmid--NZN