Paramount Closes $81 Billion Warner Bros. Takeover, Creating a New Hollywood Giant
Paramount has finalized its $81 billion acquisition of Warner Bros. Discovery, forming Skydance and reshaping the landscape of global media and entertainment.
Chanan Zevin - Chief Editor and Head of Desks
Deal Completion and Structure
Paramount has officially completed its $81 billion acquisition of Warner Bros. Discovery, resulting in the formation of a new entity named Skydance. The deal, announced on Tuesday, brings together two of the most storied names in entertainment under a single corporate structure. This transaction marks one of the largest tie-ups in the history of the media and entertainment sector. [S2]
The acquisition process involved more than a year of negotiations, regulatory reviews, and competition from rival bidders. Paramount’s persistent pursuit culminated in a mutual merger agreement with Warner Bros. Discovery in late February, following a period of intense bidding and negotiations. The transaction closed after receiving all required regulatory approvals and satisfying customary closing conditions. [S3]
Under the terms of the agreement, Warner Bros. Discovery shareholders received approximately $31.02 per share in cash. Effective immediately, Warner shares have ceased trading on the Nasdaq, and Skydance Class B shares began trading on the New York Stock Exchange under the ticker symbol 'SKYD.' [S3]
Financing and Ownership
To finance the Warner Bros. Discovery acquisition, Paramount secured billions of dollars in financial backing from three Gulf countries: Saudi Arabia, Qatar, and the United Arab Emirates. The Federal Communications Commission published the company’s request for sizable indirect ownership from these foreign investors, citing the potential to strengthen the broadcast industry. [S2]
Paramount previously disclosed that these funds were expected to indirectly own nearly 50% of equity interests in Skydance, though without voting rights. The FCC granted clearance for up to 100% indirect equity ownership to accommodate potential future investments. This move drew criticism from some regulators, who raised concerns about the precedent and the possibility of behind-the-scenes influence. [S2]
Including the assumption of billions of dollars in debt, the total value of the acquisition approaches $111 billion. The combined company is positioned as one of the largest media and entertainment businesses globally, with nearly $70 billion in revenue and a target of $6 billion-plus in run-rate synergies over the next three years. [S1]
Leadership and Governance
David Ellison, previously Paramount’s Chief Executive, will serve as Chairman and CEO of Skydance, with Ynon Kreiz, the outgoing CEO of Mattel, joining as co-CEO. The leadership team also includes Bari Weiss and Mark Thompson, with Thompson retaining his role as CNN’s editor-in-chief. [S3]
A settlement with state attorneys general, finalized prior to closing, requires Skydance to establish a 'News Editorial Independence Board' to safeguard editorial autonomy at CNN. This measure was implemented in response to concerns about potential political or shareholder influence over news operations. [S2]
The company’s board will oversee key appointments, and Ellison has publicly committed to maintaining editorial independence at CNN. He emphasized that Skydance has not discussed news coverage with any political leaders, reiterating the company’s intent to focus on trust and truth in journalism. [S2]
Combined Assets and Strategic Vision
The merger unites two major film studios, two global streaming services, and a premier television portfolio that includes CBS, HBO, and a range of cable networks. The combined entity also brings together CBS News and CNN, as well as a leading sports content portfolio featuring CBS Sports and TNT Sports. [S1]
Skydance now boasts the most diverse film and television library in the industry, with a commitment to deliver a minimum of 30 high-quality theatrical films per year and more than 180 television shows and series. The company serves over 200 million streaming subscribers worldwide and holds an expansive collection of iconic brands and franchises, including Top Gun, Harry Potter, White Lotus, and SpongeBob SquarePants. [S1]
The company’s strategy is anchored in storytelling, aiming to expand opportunities for creative talent and widen consumer choice across every entertainment vertical. Skydance plans to unify its streaming offerings into a single service over time and continue supporting independent production by commissioning and licensing content from third parties. [S1]
Industry Impact and Outlook
The Paramount-Warner Bros. Discovery merger has drawn significant attention from industry stakeholders, with both support and opposition from creative professionals. While some have expressed concerns about reduced job opportunities and diminished audience choice, others have endorsed the deal for its potential to strengthen Hollywood and expand creative possibilities. [S2]
Regulatory scrutiny was extensive, with the transaction receiving unanimous approval from competition authorities in nearly 70 jurisdictions worldwide. A federal judge published Paramount’s settlement with 12 state attorneys general to resolve antitrust concerns, clearing the final hurdle for the deal’s closure. [S3]
Looking ahead, Skydance is positioned to capitalize on its scale, content portfolio, and technological capabilities. The company targets at least $6 billion in run-rate synergies within three years and aims to reduce net leverage to a 3.0x target by the end of 2029. Its leadership emphasizes a commitment to creativity, innovation, and long-term shareholder value. [S1]