Paramount and Warner Bros. Discovery Make Mega Deal Official

topMega deal worth $111 billion warner bros discovery Officially here we go.

The two companies officially announced the deal on Friday after Netflix. officially resign It commented on the launch a day earlier, citing prices that were “no longer financially attractive.”

Paramount mogul David Ellison said: “From the beginning, our pursuit of Warner Bros. Discovery has been guided by a clear purpose: honoring the legacies of two iconic companies while accelerating our vision to build the next generation of media and entertainment companies. By combining these world-class studios, complementary streaming platforms, and the extraordinary talent behind them, we will create even greater value for our audiences, partners and shareholders, and we are very excited about what lies ahead.”
David Zaslav, CEO of Warner Bros. Discovery, added: “We are very pleased with the results we have achieved 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 100-year-old studio while providing as much certainty as possible for our investors. We look forward to working with Paramount to complete this historic transaction.”

The deal will see Paramount pay $31 per share for WBD, but also includes other elements, including a market cap fee payable to shareholders of $0.25 per quarter beginning after September 30, 2026, and a $7 billion regulatory windfall if regulatory issues prevent the deal from closing. Ticking fees mean that the longer the regulatory process, the higher the WBD price.

The deal is backed by a $47 billion equity commitment from the Ellison family and RedBird Capital and $54 billion in debt financing from Bank of America, Citigroup and Apollo. “At closing, the equity may include other strategic and financial partners,” Paramount added, without disclosing those partners. Previous bids have included financing from Middle East sovereign wealth funds, Tencent and Jared Kushner’s Affinity Partners.

The company said it expects the deal to close in the third quarter of this year and proposed an aggressive timeline underscoring its confidence in regulatory compliance.

Paramount also paid $2.8 billion in termination fees that Warner Bros. had to pay to Netflix to walk away from a signed deal, and the new deal requires WBD to pay $3 billion to Paramount if it backs out of the deal for a better offer.

California Attorney General Rob Bonta said he was already conducting a public investigation and planned to review the deal “vigorously.”

When Paramount officially announced the deal, it also made several promises to address the town’s concerns. For starters, the company said it will keep both Paramount and Warner Bros. as independent studios, producing 15 movies each per year and giving them a full 45-day window before moving to premium video on demand, with a longer window for hit movies.

The company is also committed to continuing to sell its programming to third parties and to become a buyer of content from other studios.

And Paramount reiterated its estimate that it could generate $6 billion in “synergies.” It said this will be driven by a combination of “technology integration (e.g., migrating the combined company to a single enterprise resource planning system and consolidating its streaming technology stack), enterprise-wide efficiencies, including procurement cost reductions, optimizing the combined real estate footprint, and streamlining other operational efficiencies.”

Of course, Hollywood is bracing for significant layoffs after the deal closes, but the announcement suggests that other notable assets (do both Warner and Paramount need their own studio lots in LA?) may be up for sale.

“Warner Bros. is a world-class organization, and I would like to thank David Zaslav, Gunnar Wiedenfels, Bruce Campbell, Brad Singer and the WBD Board of Directors for running a fair and rigorous process,” WBD co-CEOs Ted Sarandos and Greg Peters said in a statement Thursday. ‘We believe we will be strong stewards of Warner Bros.’ And we said our deal would have strengthened the entertainment industry and preserved and created more productive jobs in America. But this deal has always been a ‘nice to do’ deal at the right price, not a ‘must do’ deal at any price.”