Paramount is negotiating to raise around US$24 billion in capital contributions from three sovereign wealth funds led by Saudi Arabia to finance the purchase of Warner Bros. Discovery, according to a Wall Street Journal report reproduced by Reuters.
The American entertainment giant announced in February that it had reached an agreement to acquire its rival in a US$110 billion transaction, with a capital value of US$81 billion, which should be completed by the third quarter.
The merger would bring together major studios and networks, such as CNN and CBS, strengthening their competitiveness in a scenario in which streaming has been taking away audiences from traditional TV.
To make the operation viable, Saudi Arabia’s Public Investment Fund (PIF) must contribute around US$10 billion, according to sources interviewed by the newspaper. Other investors include the Qatar Investment Authority and Abu Dhabi-based L’imad Holding.
According to the Wall Street Journal, these investors will not have the right to vote in the new company resulting from the merger between Paramount and Warner. Company executives assess that the entry of these funds should not lead to a regulatory review by bodies such as the Committee on Foreign Investment in the United States (CFIUS) or the Federal Communications Commission (FCC).
