Warner Bros. Discovery has agreed to be acquired by Paramount Skydance in a $110 billion deal signed on Friday morning, according to an audio excerpt from a global company meeting reviewed by Reuters.
‘Netflix had the legal right to match PSKY’s offer. As everyone knows, they ended up deciding not to do that. This resulted in an agreement signed with PSKY this morning. So that’s the current situation,’ said Bruce Campbell, Warner Bros. chief revenue and strategy officer, at the employee meeting.
Paramount and Warner Bros. did not immediately respond to requests for comment.
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The deal – which includes about $29 billion in debt – is among the biggest media overhauls in Hollywood and will create one of the world’s largest film studios, allowing Paramount to exploit Warner’s vast trove of intellectual property, including franchises such as ‘Fantastic Beasts’ and ‘The Matrix’.
This will also allow Paramount to strengthen its streaming efforts, with a possible combination of HBO Max and Paramount+, allowing it to gain market share and compete with market leader Netflix.
The deal ends a bitter dispute after Netflix refused to match Paramount’s last offer of $31 per share, which was considered superior by Warner Bros. to the streaming pioneer’s proposal of $27.75 per share for its assets.
Paramount had its eye on Warner Bros since late last year, when it launched a hostile campaign to snatch the company from the streaming giant, consistently increasing its offer.
The company, led by David Ellison, son of billionaire Larry Ellison, convinced Warner’s board to return to the negotiating table, raising the possibility of an improved cash offer.
In its revised proposal, Paramount increased the termination penalty it would pay if the deal did not receive regulatory approval from $5.8 billion to $7 billion.
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Activist investor Ancora Holdings, which owns a small stake in Warner Bros., also intensified pressure on the HBO owner to become more involved with Paramount.
Still, the merger is likely to draw antitrust scrutiny in Washington, foreign countries and U.S. states including California, despite the Ellisons’ ties to President Donald Trump.
Lawmakers on both sides of the political spectrum have expressed concern that any deal to acquire Warner Bros. could result in fewer options and higher prices for consumers.
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Cinema operators are also concerned that the merger of major Hollywood studios could result in job losses and a reduction in the number of films released in theaters.
