Paramount-WBD Unveil Plans for Newly Formed Company as Board Approves $110 Billion Merger
Paramount and Warner Bros. Discovery have begun laying out their vision for the combined company after both media giants’ boards officially approved their $110 billion merger on Friday.
The companies have committed to produce a minimum of 30 theatrically released films per year, or 15 for each studio. Every film will receive a full theatrical release, with a minimum 45-day window globally before becoming available on paid video-on-demand (VOD), with the intention of 60-90 days or more for its most successful releases before being available on streaming. Paramount will continue to adhere to specific windowing regimes in geographies it operates in, including in France where Paramount maintains its windowing commitments.
Both studios will also continue to support a vibrant third-party ecosystem by licensing their films and shows across their own and third-party platforms, while remaining active buyers of content from third-party studios and independent producers.
Together, the combined company will own a film library of more than 15,000 titles and thousands of hours of television programming, including franchises such as “Harry Potter,” “Mission Impossible,” “Lord of the Rings,” “Game of Thrones,” the DC Universe, “Teenage Mutant Ninja Turtles,” “Transformers,” “Star Trek” and “SpongeBob SquarePants.”
It will also control rights to the NFL, Olympics, UFC, PGA Tour, NHL, Big Ten and Big 12 football, NCAA College basketball and Champions League and a vast portfolio of cable and free-to-air networks in over 200 countries and territories, including HBO, MTV, Comedy Central, Discovery Channel and more.
Additionally, the company will leverage their combined streaming scale of Paramount+, HBO Max, and Pluto TV. Paramount+ has 79 million streaming subscribers as of its latest quarter. Meanwhile Warner Bros. Discovery’s streaming division, which includes HBO Max and Discovery+, touted 131.6 million globally.
“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,” Paramount CEO David Ellison said in a statement. “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.”
“I’m very pleased with the outcome we achieved for WBD shareholders and the entertainment industry,” WBD CEO David Zaslav added. “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.”
As previously reported, Paramount will pay $31 per share in cash to acquire 100% of WBD’s total outstanding shares. The transaction is funded by $47 billion in equity, fully backed by the Ellison Family and RedBird Capital Partners, though it may include other strategic and financial partners at closing.
The deal also includes $54 billion of debt commitments from Bank of America, Citigroup, and Apollo, which includes $15 billion to backstop WBD’s existing bridge facility and $39 billion of incremental new debt. The $54 billion excludes $3.5 billion of bridge financing from these institutions to backstop an existing $3.5 billion revolving credit facility.
Existing Paramount stockholders will have the opportunity to participate in a rights offering of up to $3.25 billion of Class B Paramount stock alongside the new equity investment, which is expected to occur closer to the closing date, at a price of $16.02 per share.
The companies are targeting a shareholder vote for early spring and have said they expect the deal to close in the third quarter of 2026, or by Sept. 30, pending the necessary approvals. In the event that the deal does not close by then, Paramount has agreed to pay WBD shareholders a 25 cent per share “ticking fee” for each quarter until closing. Paramount has also agreed to pay a $7 billion termination fee in the event that the deal isn’t closed due to regulatory matters.
Paramount expects the merger to yield over $6 billion in synergies, which will be driven by technology integration, such as migrating the combined company to a single enterprise resource planning system and consolidating streaming technology stacks; corporate-wide efficiencies in areas such as procurement and real estate footprint; and streamlining operational efficiencies. The company plans to return to investment grade credit metrics within three years of closing.
Executives will discuss its plans for the combined company in more detail on a conference call on Monday at 8:30 am ET.
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