It’s official. For real this time. Warner Bros. Discovery is selling itself to Paramount for $31 a share in cash in a deal worth $110 billion.
The companies unveiled their formal agreement on Friday. Paramount will hold a conference call and webcast on Monday at 8:30am ET to discuss the deal.
The formal announcement comes after WBD jilted Netflix, saying it received a Superior Proposal from the David Ellison company. Netflix had four days to match but declined immediately and walked away, leaving Par triumphant after a months-long hostile takeover attempt to pry apart its rivals.
Paramount said the merged company is committed to producing a minimum of 30 theatrical films annually — 15 per studio per year. It promised film will receive a full theatrical release, with a minimum 45-day window globally and the current industry standard home video window prior to availability on subscription streaming services. Doubts around Netflix’s ultimate commitment to theatrical and intermediate windows was a major concern fo exhibitors and many in the Hollywood community.
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The merger is expected to close in the third quarter of 2026, subject regulatory clearances and approval by WBD shareholders, with a vote expected in the early spring.
Paramount expects over $6 billion in cost synergies, short for cost savings. It cited a “combination of: technology integration (such as migrating the combined company to a single enterprise resource planning system and consolidating streaming technology stacks), corporate-wide efficiencies, including procurement savings, optimizing the combined real estate footprint, and otherwise streamlining operational efficiencies.”
Many industry players anticipate thousands of layoffs.
The transaction is funded by $47 billion in equity fully backed by the Ellison Family and RedBird Capital Partners. At closing, the equity may include other strategic and financial partners. Paramount did not name them but its previous hostile tender offer included backing from the Public Investment Fund (Kingdom of Saudi Arabia), L’imad Holding Company PJSC (Abu Dhabi) and Qatar Investment Authority (Qatar). Affinity Partners, the investment fund of President Donald Trump’s son-in-law Jared Kushner, had also been involved but withdrew. Ditto for China’s Tencent.
Under the terms of the equity commitments, new shares of Class B Paramount stock will be issued at a price of $16.02 per share.
In addition to the new cash equity investment, the transaction is backed by $54 billion of debt commitments from Bank of America, Citigroup, and Apollo, which includes $15 billion to backstop WBD’s existing bridge facility and $39 billion of incremental new debt. The $54 billion excludes $3.5 billion of bridge financing from these institutions to backstop an existing $3.5 billion revolving credit facility.
The combined company will own a film library of more than 15,000 titles and thousands of hours of television programming with franchises including Harry Potter, Mission Impossible, Lord of the Rings, Game of Thrones, the DC Universe, Teenage Mutant Ninja Turtles, Transformers, Star Trek and SpongeBob SquarePants.
Combined sports rights will include the NFL, Olympics, UFC, PGA Tour, NHL, Big Ten and Big 12 Football, NCAA College Basketball, and Champions League, with the ability to distribute these rights collectively across all of its platforms.
The merged company will have a massive portfolio of cable networks. That will include CNN, to the alarm of some lawmakers and many in the news business given shifts at CBS since David Ellison acquired control.
The new company will inherit a diverse international portfolio from the former Discovery Communications, present in over 200 countries and territories with cable and free-to-air networks.
Ellison, the son of Oracle co-founder Larry Ellison, has stressed technology and today’s announcement promised streamlining of “the technological underpinning of every aspect of the combined company’s businesses.”
Paramount said it will be well-positioned to invest in growth, noting marquee deals since the Skydance merger with Trey Parker and Matt Stone of South Park, the UFC, the Duffer Brothers and Activision. However, Wall Streeters have noted it will carry a huge amount of debt that may constrain investment.
“From the very beginning, 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. 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,” said Paramount CEO David Ellison.
“I’m very pleased with the outcome we 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 our century-old studio while delivering as much certainty as possible for our investors. We look forward to working with Paramount to complete this historic transaction,” saoid WBD CEO David Zaslav.