Finally, Paramount Skydance will be the one to acquire Warner Bros Discovery. The company has improved the offer it launched in December as part of its hostile takeover to take over the audiovisual group, which has led to Netlifx, first interested in the film studio, to back out. Thus, Paramount and Warner have reached a definitive merger agreement and, in this way, will create a global media and entertainment company.
As Paramount announced a few days ago, it will pay $31 per share, which raises the enterprise value of the movement to $111 billion ($81 billion in equity value). These figures are higher than those presented at the end of last year, with which it offered 30 dollars per share, raising the operation to 108.4 billion dollars.
Netflix offered to buy Warner Bros for $82.7 billion
This is a more succulent proposal than that of Netflix, which at the beginning of December was nominated as the main candidate to acquire the Warner Bros. film studio for a total enterprise value of approximately $82.7 billion, that is, $27.75 per share.
The object of the transaction, however, differed. The agreement reached with Netflix involved the Warner Bros studio and the on-demand service HBO Max, but left out the Warner Bros Discovery television network division, which includes, among others, CNN, TBS and HGTV. In contrast, Paramount’s proposal covered the entire company.
The new agreement, as explained by Paramount in a statement, has been unanimously approved by the Boards of Directors of both companies and is expected to close in the third quarter of 2026. The operation is still subject to the usual closing conditions, including regulatory authorizations and the approval of Warner Bros Discovery shareholders.
If the deal between Paramount and Warner Bros is completed, it will mark the third time that Warner Bros., HBO, CNN, TNT and its other assets have been sold to new owners since 2018, when AT&T bought the conglomerate. Then, in 2022, the merger of WarnerMedia with Discovery Inc. took place.
Paramount assures that the operation will open new innovative and attractive narrative opportunities in film and television studios, streaming platforms and linear television. One of the main consequences of the movement is that Paramount would own large intellectual property titles, such as “Game of Thrones”, “Harry Potter” or the DC superhero universe.
Paramount has committed to betting on cinema and Hollywood. It assures that it will maintain both film studios, and has promised the annual release of 15 feature films per studio, both for its platforms and for external distribution partners. Each film will be released in theaters, with a minimum period of 45 days worldwide before being available on video-on-demand platforms.
As noted by Paramount in its statement, it can be expected to combine its streaming assets with those of Warner Bros. Discovery, creating a global streaming competitor. It ensures that the combination of Paramount+, HBO Max and Pluto creates a highly competitive direct-to-consumer business that expands both consumer offerings and opportunities for creative talent and workforce.
As a result of the operation, the resulting company will have a film library of more than 15,000 titles and thousands of hours of television programming; as well as one of the most attractive and competitive sports rights portfolios in the industry, which includes, among other things, the NFL, the Olympic Games and the UFC.
“We will create even greater value for the public, partners and shareholders”
David Ellison, President and CEO of Paramount, has indicated that the motivation for the purchase of Warner Bros. Discovery has been guided by the intention to honor the legacy of two iconic companies and, at the same time, promote the construction of 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 are extremely excited about what lies ahead.“, he expressed in the statement.
For his part, David Zaslav, President and CEO of Warner Bros. Discovery, has stated that he is satisfied with the result, both for shareholders and the entertainment industry. “Our guiding principle throughout this process has been to ensure a transaction that maximizes the value of our iconic assets and our century-old studio, while offering the greatest possible security to our investors.“, he commented.
The agreement between Paramount and Warner Bros Discovery is possible as a result of Netflix’s withdrawal from the fight. The streaming platform declined to increase its offer after receiving a notification from Warner Bros. Discovery indicating that Paramount Skydance’s latest proposal constituted a “superior proposal.” In a statement, they stated that the price required to match the offer was no longer financially attractive.
“We believe we would have been strong stewards of Warner Bros.’ iconic brands and that our agreement would have strengthened the entertainment industry and preserved and created more production jobs in the United States. However, this transaction was always an advantage at the right price, not a necessity at any price” commented Ted Sarandos and Greg Peters, Co-CEOs of Netflix.
As shared by the platform, Paramount has paid the $2.8 billion that Warner Bros Discovery had to pay for the termination of the signed agreement.
