Paramount Global Acquires Warner Bros. Discovery in $111 Billion Merger

Paramount Global, led by David Ellison, agreed to acquire Warner Bros. Discovery in a deal valued at approximately $110 billion to $111 billion, or $31 per share. The acquisition followed a bidding war in which Netflix withdrew after determining a matching bid was "no longer financially attractive." To finance the deal, Paramount Global secured $24 billion in equity commitments from Middle Eastern sovereign wealth funds, including Saudi Arabia's Public Investment Fund, and $54 billion in debt commitments from Bank of America, Citigroup, and Apollo.

Ellison announced plans to merge Paramount+ and HBO Max into a single unified platform to better compete with industry leaders, targeting a combined base of over 200 million subscribers. While the streaming services will consolidate, Ellison pledged to maintain the creative independence of the HBO brand and the editorial independence of CNN. Paramount Global also intends to retain all legacy cable networks to drive operational efficiencies. The company expects to achieve over $6 billion in cost savings over three years, primarily through non-labor sources like IT and real estate optimization, though some reports suggest deeper cuts may be necessary.

The merger faces significant regulatory and political headwinds. California Attorney General Rob Bonta is conducting a "vigorous" investigation, and the deal has drawn criticism from Senator Elizabeth Warren and the Writers Guild of America over antitrust and labor concerns. While FCC Chair Brendan Carr signaled the agency would not block the deal, the investment from Gulf sovereign funds has triggered calls for national security reviews. Credit agencies have reacted negatively, with Fitch Ratings downgrading Paramount Global to junk status due to the company's $79 billion net debt load.