Paramount‘s $111 billion megadeal for Warner Bros. Discovery is officially a go.
The two companies formally unveiled the deal Friday after Netflix formally bowed out of the running a day earlier, citing a price that was “no longer financially attractive.”
Paramount mogul David Ellison said: “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.”
Warner Bros. Discovery CEO David Zaslav added, “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.”
The deal will see Paramount pay $31 per share for WBD, but it also had other elements, including a ticking fee payable to shareholders equal to $0.25 per quarter beginning after Sept. 30, 2026, as well as a $7 billion regulatory termination in the event the transaction does not close due to regulatory matters. The ticking fee means that the price of WBD will rise the longer the regulatory process takes. California Attorney General Rob Bonta has already said they have an open investigation and intend to be “vigorous” in their review of the deal.
Paramount has also agreed to pay the $2.8 billion termination fee that Warner Bros. will need to pay to Netflix.
“Warner Bros. is a world-class organization, and we want to thank David Zaslav, Gunnar Wiedenfels, Bruce Campbell, Brad Singer and the WBD Board for running a fair and rigorous process,” WBD co-CEOs Ted Sarandos and Greg Peters said in a statement Thursday. “We believe we would have been strong stewards of Warner Bros.’ iconic brands, and that our deal would have strengthened the entertainment industry and preserved and created more production jobs in the U.S. But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
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