It’s official! Paramount buys Warner Bros Discovery in historic $110 billion deal as Netflix drops out of race

Warner Bros. Discovery has agreed to be acquired by Paramount Skydance in a $110 billion deal, ending a high-stakes bidding war after Netflix pulled out of a deal with the owner of HBO Max.

The deal, with an equity value of $81 billion, is expected to be completed in the third quarter of 2026, according to the companies’ statement on Friday. Reuters first reported that Warner Bros. Discovery and Paramount had signed a deal earlier in the day, citing an audio clip of a global town hall held by the company.

The merger would create a media powerhouse that combines major studios and networks like CNN and CBS to compete more aggressively; because streaming will disrupt the industry by drawing viewers away from traditional linear TV.

In the statement made by the companies, it was stated that the combined company will have a film library consisting of more than 15,000 films and popular series such as Game of Thrones, Mission Impossible, Harry Potter and DC Universe.

Netflix on Thursday declined to match Paramount’s latest offer of $31 per share; Warner Bros. deemed the offer superior to the streaming pioneer’s $27.75 per share deal for studio and streaming assets.

Warner Bros. received the contracts from Paramount on Saturday and concluded through on-and-off negotiations over the next two days that Paramount’s offer was superior, according to a source familiar with the negotiations.

Warner Bros. did not immediately respond to Reuters’ request for comment.

In extended trading, Paramount’s shares rose around 3% while Netflix’s shares fell 1%.

Warner Bros. shareholders are expected to vote on the proposed merger in early spring 2026, the companies said.

The acquisition will be financed by $47 billion of equity capital from Ellison Family and RedBird Capital Partners, with an additional $54 billion in debt commitments from Bank of America, Citigroup and Apollo. Paramount also plans to offer up to $3.25 billion in Class B common stock to existing shareholders.

Paramount and Warner Bros. said they expect savings of more than $6 billion thanks to technology integration, corporate efficiencies and streamlining of operations.

While Paramount won the bidding war for Warner Bros. Discovery, the merger came under scrutiny. California regulators are preparing for a strong review of the $110 billion deal that could reshape Hollywood.

Paramount, led by David Ellison, son of billionaire Larry Ellison, has deep political connections to the Trump administration, which could help it receive more favorable treatment, some analysts said.

California is already investigating the settlement and will be “vigorous” in its review, California State Attorney General Rob Bonta said Thursday.

Paramount has been after Warner Bros. since late last year, when it launched a hostile campaign to wrest the company away from the streaming giant by steadily increasing its bid.

The company, led by David Ellison, son of billionaire Larry Ellison, has drawn Warner’s board back to the bargaining table, raising the possibility of a better cash offer.

In its revised offer, Paramount increased the termination fee it would pay if the deal fails to gain regulatory approval from $5.8 billion to $7 billion.

Paramount has paid the $2.80 billion termination fee that Warner Bros. owes Netflix, the streaming giant said in a regulatory filing Friday.

“Netflix was the big winner in the Warner Bros. Discovery sweepstakes. Netflix earns a termination fee paid by Paramount. By starting a bidding war, Netflix increased the price Paramount had to pay, which will ultimately burden Paramount-WBD with more debt,” said Emarketer analyst Ross Benes.

‘EU ANTITRUST APPROVAL IS NOT A MAJOR OBSTACLE’

Paramount is expected to easily win European Union antitrust approval, and a small portion of the necessary investments will be withdrawn, Reuters reported Friday, citing sources.

The deal is among Hollywood’s biggest media shake-ups and will create one of the world’s largest movie studios and allow Paramount to tap into Warner’s trove of intellectual property, including franchises like “Fantastic Beasts” and “The Matrix.”

The new company promised to preserve both studios and produce at least 30 feature films a year.

But lawmakers on both sides of the political spectrum have expressed concerns that any deal to acquire Warner Bros. could lead to fewer choices and higher prices for consumers.

Cinema operators also worry that merging major Hollywood studios could lead to job losses and reduce the number of movies released in theaters.

“The loss of competition would be a disaster for writers, consumers, and the entire entertainment industry. This merger must be blocked,” the Writers Guild of America, a union that represents thousands of television and film writers and other media workers, said in a statement. he said.