Paramount Skydance to Acquire Warner Bros. Discovery in $110 Billion Merger, Creating Global Media Powerhouse

Paramount to Acquire Warner Bros. Discovery in Landmark \$110 Billion Deal

Key Highlights for Investors

Paramount Skydance Corporation (NASDAQ: PSKY) to acquire 100% of Warner Bros. Discovery, Inc. (NASDAQ: WBD) in a cash deal valued at \$110 billion in enterprise value, and \$81 billion in equity value.
WBD shareholders to receive \$31.00 per share in cash, plus a ticking fee of \$0.25 per share per quarter if closing is delayed beyond September 30, 2026.
Paramount to issue \$47 billion in new Class B shares at \$16.02 per share, fully backed by the Ellison Family and RedBird Capital Partners, with additional rights offering for existing shareholders of up to \$3.25 billion.
Transaction is expected to generate over \$6 billion in synergies and is not subject to financing conditions.
Boards of both companies have unanimously approved the deal; closing expected in Q3 2026, pending regulatory and shareholder approvals.

Strategic Rationale and Expected Impact

This transformational merger aims to create a next-generation, global media and entertainment powerhouse, combining world-class studios, iconic intellectual property, and strong technological infrastructure. Paramount and WBD together will offer an unmatched portfolio of content, including franchises such as Game of Thrones, Harry Potter, Mission Impossible, Top Gun, DC Universe, SpongeBob SquarePants, Lord of the Rings, Star Trek, and Teenage Mutant Ninja Turtles.

Streaming and Theatrical Expansion

The combined company will invest in expanding both studios and will continue to produce a minimum of 30 theatrical films annually (15 per studio), each with a full theatrical release and a minimum 45-day global window before paid VOD, and then transition to home video and streaming.
Paramount+, HBO Max, and Pluto TV will be integrated to create a premier, highly competitive direct-to-consumer (DTC) platform, aiming to accelerate subscriber growth and deepen engagement.
Both studios will actively license films and shows to third-party distributors, maintain a vibrant third-party content ecosystem, and remain buyers of independent content.

Sports and Linear Networks

The merged entity will boast one of the largest sports rights portfolios in the industry, including rights to the NFL, Olympics, UFC, PGA Tour, NHL, Big Ten and Big 12 Football, NCAA Basketball, and Champions League, enhancing distribution across all platforms.
Complementary cable network portfolios spanning entertainment, sports, and news are expected to strengthen cash flow, unlock operational efficiencies, and provide a unified platform for advertisers.

International and Technology Footprint

The combined company will have a presence in over 200 countries and territories, leveraging both cable and free-to-air networks, and facilitating more local production and global distribution of content.
Integration of technology infrastructure is expected to generate significant efficiencies, improve user experience, and eliminate redundancies.

Financial Structure and Shareholder Considerations

The transaction will be financed through \$47 billion in new equity (Class B shares at \$16.02 per share) and \$54 billion in debt commitments from Bank of America, Citigroup, and Apollo, with \$15 billion earmarked for WBD’s existing bridge facility and \$39 billion of new debt. Additional \$3.5 billion bridge financing will backstop Paramount’s existing revolving credit facility.
Paramount expects to achieve a net debt-to-EBITDA ratio of 4.3x at closing (synergized), with a clear path to investment grade credit metrics within three years.
Existing Paramount shareholders will be offered rights to participate in a \$3.25 billion equity offering at the same \$16.02 per share price.
The deal values WBD at a 7.5x multiple of fully synergized 2026 EBITDA.

The transaction is not subject to any financing conditions and Paramount has terminated its prior all-cash tender offer for WBD in light of this definitive agreement.

Leadership Commentary

David Ellison, Chairman and CEO of Paramount: “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.”

David Zaslav, President and CEO of Warner Bros. Discovery: “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.”

Risks and Considerations

The transaction is subject to customary closing conditions, including regulatory approvals (notably antitrust clearance), and approval by WBD shareholders.
There are risks related to integration, potential adverse effects during the transaction period (such as talent departures or operational distractions), and exposure to litigation.
The companies caution that there is no guarantee all anticipated synergies will be realized, and that the combined entity will face ongoing challenges in a highly competitive, rapidly evolving media landscape.
Shareholders should review all related SEC filings when available, including proxy statements, for additional details and risk disclosures.

Advisors

Centerview Partners LLC and RedBird Advisors are lead financial advisors to Paramount, with additional advisory from Bank of America Securities, Citi, M. Klein & Company, and LionTree Advisors. Legal counsel is provided by Cravath, Swaine & Moore LLP and Latham & Watkins LLP.
Allen & Company, J.P. Morgan, and Evercore advise WBD, with legal counsel from Wachtell Lipton, Rosen & Katz, and Debevoise & Plimpton LLP.
Barclays Capital and Cleary, Gottlieb, Steen & Hamilton LLP advise the Paramount Special Committee.

Upcoming Events

Paramount will host a conference call and webcast on Monday, March 2 at 8:30am ET to discuss the merger agreement, with details and replay available on the Paramount Investor Relations homepage.

Conclusion

This proposed merger represents one of the largest and most significant transactions in the media and entertainment industry, poised to create a dominant force across film, television, streaming, sports, and international markets. Investors should pay close attention to regulatory outcomes, synergy realization, financing structure, and integration execution, all of which can materially impact the value of both Paramount and WBD shares in the months ahead.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. The transaction described is subject to regulatory approvals and other risks as outlined in SEC filings. Investors should review all official filings and consult with their financial advisors before making investment decisions.