In one of Hollywood’s biggest corporate shake-ups in recent years, Warner Bros. shareholders on Thursday, April 23, approved Paramount’s acquisition by Skydance, marking a major step forward for the blockbuster entertainment deal.
The merger would bring together two of the industry’s most prominent studios, combine their leading streaming platforms, and place one of the world’s largest media companies under the leadership of a 43-year-old with no prior experience running a studio of this scale.
The transaction values the combined entity at about $81 billion in equity, or roughly $111 billion including debt, with a cash offer of $31 per share representing a 147% premium to Warner Bros. Discovery’s unaffected share price following the bidding war.
Another important step in the path to the completion of this historic transaction that is going to create tremendous value to our stockholders is today’s stockholder approval, Warner Bros. Discovery CEO, David Zaslav, said in a statement.
According to the company, the vote went through by a resounding margin. Warner Bros. Discovery stock was priced at approximately $8/share a year ago. The premium was at 31 making it an easy decision to approve to most investors.
On its part, Paramount cast the vote to affirm a deal that has not been under dispute at the board level: boards of both companies had unanimously suggested its passing in February. Another milestone the company reached in its plans to complete our acquisition of Warner Bros.
Discovery is that shareholder approval, which relied on the success of our equity and debt syndications and advances in regulatory approvals. We anticipate closing the deal within next few months and making the next generation media and entertainment company better serving both the creative community and consumers.
What the Merger Means for Control of Hollywood’s Biggest Properties?
The magnitude of the merger is astounding. With David Ellison, son of co-founder of Oracle Larry Ellison, who is a close Trump ally and personally contributed up to $46.7 billion to the deal, the union of two of five remaining legacy studios: Paramount Pictures and Warner Bros. It would own a library that includes The Godfather, Top Gun, SpongeBob SquarePants, Mission: Impossible, the DC Universe, Harry Potter, Casablanca and Game of Thrones.
It would unify HBO Max and Paramount+ into one unified streaming service. And it would have CNN, HBO, TBS, TNT and CBS amongst dozens of other cable and broadcast properties. Ellison has given a commitment that 30 or more theatrical releases will be made annually by the combined studio.
Ellison spoke directly of the purpose of the deal at, CinemaCon in Las Vegas on April 16, one week before the shareholder vote. Right at the start, we have been on a mission to acquire Warner Bros.
Discovery with a clear mission that is to honour the heritage of two great brands and in the process propel our vision of creating a next-generation media and entertainment company, he said.
Netflix Pulls Out, DOJ Investigates, Hollywood Resists
To achieve this, Paramount had to emerge victorious in a nasty bidding contest. Netflix had become the preferred bidding company to WBD and was commonly viewed as the financial favourite, considering its streaming dominion.
However, Netflix pulled out on February 26 and Paramount triumphed. There was no free exit: Paramount paid Netflix a termination fee of 2.8 billion. The political closeness of the Ellison family to Trump as well as the political pressure that Netflix would have possibly experienced because of monopoly in streaming in the industry were extensively mentioned as causes of the way the competition was solved.
The most significant test the deal ever faced has come: U.S. Department of Justice antitrust review. In January, the DOJ made a formal second information request and the statutory waiting period was suspended.
The antitrust division head, Omeed Assefi, stated that the deal would definitely not get fast-track approval on political grounds, a clear indication considering that Ellison has White House connections.
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The review of the transaction by European regulators also might entail divestiture of assets. The deal is also being investigated by California Attorney General Rob Bonta in regard to antitrust violations.
There has also been opposition on two more directions. Over 4,000 film actors, filmmakers, scriptwriters, and producers have appended their sign to an open letter opposing the merger, citing it will hurt working conditions and put dynamic creative control in irresponsible hands.
Senators such as Liz Warren, Chuck Schumer, and Cory Booker, are Democratic and have written to the FCC inquiring it into the foreign financing of the deal, including money raised via Saudi Arabia, Qatar, and the United Arab Emirates.
The deadline is paramount, as it should achieve it prior to September 30, 2026. The deal agreement has a ticking fee provision that stipulates that Paramount will pay WBD stockholders an extra 25 cents per share each quarter in which the deal does not close after that date.
CNN role within the merger is one of the most anticipated subplots of the deal: Ellison has stated that CNN will continue to be an editorial autonomous entity and CBS News bosses have privately mentioned the possibility of merging the two network; a move that would create the largest news enterprise in American television.
