WASHINGTON (dpa-AFX) - Paramount Skydance Corporation (PSKY) announced it has entered into a definitive merger agreement to acquire Warner Bros. Discovery Inc. (WBD). The all-cash transaction, valued at $81 billion in equity and $110 billion in enterprise value, positions Paramount as a premier global media and entertainment powerhouse.
The announcement follows a dramatic turn in the industry, as Netflix declined to raise its offer for WBD, effectively clearing the path for Paramount to step in with its $81 billion bid.
Under the agreement, Paramount will pay $31 per share in cash for WBD's outstanding stock. To protect shareholders, a 'ticking fee' of $0.25 per share per quarter will be added if the transaction has not closed by September 30, 2026. Paramount projects that the deal will generate over $6 billion in synergies, achieved through technology integration, procurement savings, real estate optimization, and streamlined operations across the combined company.
The financing package is equally ambitious. Paramount has secured $47 billion in equity, backed by the Ellison Family and RedBird Capital Partners, with new Class B shares priced at $16.02 each. In addition, $54 billion in debt commitments from Bank of America, Citigroup, and Apollo will support the transaction, including funds to backstop WBD's existing bridge facility. Paramount shareholders will also be offered a $3.25 billion rights offering at the same share price, ensuring broad participation in the deal's funding.
This merger is expected to close in the third quarter of 2026, pending regulatory approvals and a shareholder vote scheduled for early spring.
Warner Bros. Discovery closed the regular trading session at $28.17, down $0.63 or 2.19%. In after-hours trading, the stock showed a slight recovery, rising to $28.26, an increase of $0.09 or 0.32%.
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