Paramount to Acquire Warner Bros. Discovery in \$110 Billion Mega-Merger: Detailed Analysis for Investors

Los Angeles and New York, February 27, 2026 — In a landmark deal poised to reshape the global media and entertainment landscape, Paramount Skydance Corporation (“Paramount”) has announced its definitive agreement to acquire Warner Bros. Discovery, Inc. (“WBD”) for an enterprise value of \$110 billion. This all-cash transaction, unanimously approved by the boards of both companies, is set to create a next-generation global media powerhouse combining world-class content, technology, and distribution capabilities.

Key Transaction Highlights

• Acquisition Structure: Paramount will acquire 100% of WBD for \$31 per share in cash, valuing WBD at \$81 billion in equity value and \$110 billion in enterprise value. WBD shareholders will receive a \$0.25 per share “ticking fee” for each quarter (measured daily) if the deal has not closed by September 30, 2026.
• Financing: The deal is funded by \$47 billion in new Class B Paramount shares at \$16.02 per share, fully backed by the Ellison Family and RedBird Capital Partners. An additional \$54 billion in debt commitments comes from Bank of America, Citigroup, and Apollo, including \$15 billion to backstop WBD’s existing bridge facility and \$39 billion in new debt. Paramount shareholders will also have the opportunity to participate in a rights offering of up to \$3.25 billion in new Class B shares at the same price.
• Synergies: Paramount expects over \$6 billion in synergies from technology integration, operational efficiencies, procurement savings, and real estate optimization. The merger values WBD at 7.5x its fully synergized 2026 EBITDA.
• Debt Profile: At closing, the combined entity is expected to have a net debt-to-EBITDA ratio of 4.3x, with a plan to reach investment grade credit metrics within three years.
• Shareholder Vote: The transaction requires approval by WBD shareholders, with a vote slated for early spring 2026. The deal is expected to close in Q3 2026, pending regulatory and other customary approvals.

Strategic and Financial Rationale

• Hollywood Champion: The merged company will maintain both Paramount and WBD studios, investing in creative engines and talent to deliver a pipeline of high-quality content, including a minimum of 30 theatrical films annually (15 per studio).
• Global Streaming Powerhouse: The combination of Paramount+, HBO Max, and Pluto TV will create a formidable direct-to-consumer (DTC) streaming platform with enhanced reach and monetization, directly challenging industry leaders.
• Content and IP Portfolio: The merged entity will own a library of over 15,000 film titles and thousands of hours of TV programming, including franchises such as Game of Thrones, Harry Potter, Mission Impossible, Top Gun, DC Universe, SpongeBob SquarePants, Lord of the Rings, Transformers, Star Trek, and more.
• Sports Rights Portfolio: The company will control one of the industry’s strongest portfolios of sports rights, including the NFL, Olympics, UFC, PGA Tour, NHL, Big Ten and Big 12 Football, NCAA College Basketball, and Champions League, with cross-platform distribution capabilities.
• Theatrical and Content Distribution: Every film will receive a full theatrical release (minimum 45-day global window, with an intention for 60-90 days or more for top-performing titles) before transitioning to paid video-on-demand and then to subscription streaming. Paramount will continue to observe strict windowing regimes in key markets, including France.
• Stronger Linear Networks: A complementary portfolio of cable networks across entertainment, sports, and news will enhance cash flow, unlock efficiencies, and provide a unified, compelling platform for advertisers.
• International Reach: With a presence in over 200 countries, the company will be able to localize production and distribution, serving global audiences with diverse premium content across TV, film, sports, and news.
• Technology Integration: Streamlined tech infrastructure will improve user experience, operational efficiency, and eliminate redundancies across the enterprise.
• Growth Initiatives: The combined company will continue to invest in marquee content deals and creative partnerships, supported by significant cash flow and investor backing.

Leadership Commentary

David Ellison, Chairman and CEO of Paramount (a Skydance Corporation):
“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.”

Financial Advisors and Legal Counsel

• Paramount: Centerview Partners LLC and RedBird Advisors (lead financial advisors); Bank of America Securities, Citi, M. Klein & Company, LionTree Advisors (financial advisors); Cravath, Swaine & Moore LLP and Latham & Watkins LLP (legal counsel).
• Investor Consortium: Latham & Watkins LLP (legal counsel to Ellison Family/RedBird Capital Partners).
• WBD: Allen & Company, J.P. Morgan, Evercore (financial advisors); Wachtell, Lipton, Rosen & Katz; Debevoise & Plimpton LLP (legal counsel).
• Special Committee of Paramount Board: Barclays Capital (financial advisor); Cleary, Gottlieb, Steen & Hamilton LLP (legal counsel).

Price-Sensitive and Shareholder-Relevant Details

• Premium Offer: The \$31 per share cash offer for WBD represents a significant premium over recent trading prices, with a “ticking fee” for shareholders if the deal is delayed, directly impacting share valuation.
• Rights Offering: Existing Paramount shareholders will have the opportunity to participate in a \$3.25 billion rights offering at \$16.02 per share, potentially affecting dilution and future share value.
• Debt and Leverage: The considerable new leverage (net debt/EBITDA of 4.3x at closing) and the path to investment grade within three years may impact credit ratings, borrowing costs, and ultimately shareholder returns.
• Regulatory Approvals: The transaction’s completion is subject to regulatory clearances, including U.S. antitrust review, and approval by WBD shareholders — any delays or obstacles could impact share prices in the interim.
• Synergy Realization: The \$6 billion in expected synergies, if achieved, could materially improve profitability and cash generation, affecting future valuations.
• Integration Risks: The complexity of merging two large organizations, technology stacks, and content pipelines introduces execution risk that could affect future earnings and share performance.

Potential Risks and Forward-Looking Statements

Investors should be aware of a range of risks, including:

• Failure to obtain regulatory or shareholder approval
• Integration challenges and failure to realize projected synergies
• Adverse business impacts during the merger process (employee departures, customer uncertainty, litigation, etc.)
• Uncertain macroeconomic and competitive environments
• Potential volatility in share price due to the dual-class structure and changes in control
• Risks related to debt levels and interest rates

Next Steps

• A special WBD shareholder vote is expected in early spring 2026.
• Closing is anticipated in Q3 2026, subject to all customary conditions.
• A conference call and webcast to discuss the merger will be held on Monday, March 2, at 8:30am ET.

Disclaimer

This article is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell any securities. Investors are urged to read all relevant filings with the SEC, including proxy statements and risk factors, before making any investment decisions. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected.

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