Warner Bros. Discovery enters into a merger deal with Paramount Skydance

Paramount Skydance and Warner Bros. Discovery Announce Major Merger

Paramount Studios in Los Angeles, 2025. Photo by Eric Thayer / Getty Images · Eric Thayer

On Friday, Warner Bros. Discovery and Paramount Skydance officially entered into an acquisition agreement, marking a significant milestone in the entertainment industry. This merger is set to become one of the most impactful media consolidations in recent years.

The announcement came just a day after Netflix unexpectedly withdrew from the competition to acquire Warner Bros. Discovery’s studio and streaming divisions, bringing an end to a highly watched corporate contest in Hollywood.

Paramount Skydance’s proposal, offering $31 per share, places Warner Bros. Discovery’s value at approximately $77 billion. The deal encompasses the Warner Bros. film studio, HBO Max streaming service, and a collection of cable networks such as CNN. In contrast, Netflix’s bid did not include the cable channels.

When factoring in Warner Bros. Discovery’s existing debt, the total value of the acquisition exceeds $110 billion.

Both companies’ boards of directors unanimously approved the agreement, according to a joint statement. The transaction is subject to standard closing conditions, including regulatory approval and a shareholder vote, which is anticipated in early spring 2026.

If the deal is not finalized by September 30, Warner Bros. Discovery shareholders will receive a quarterly “ticking fee” of $0.25 per share.

Regulatory review is still pending, and Democratic lawmakers in Congress have pledged to closely examine the merger. Paramount Skydance’s offer includes a $7 billion reverse termination fee should regulators block the transaction.

Should the merger proceed, it would bring together two legendary Hollywood studios, combining a vast library of intellectual property—from Paramount’s “The Godfather” and “SpongeBob SquarePants” to Warner Bros. Discovery’s “Casablanca” and Batman.

Leadership and Negotiations

David Ellison, who leads Paramount Skydance and is the son of tech billionaire Larry Ellison, played a central role in the deal. Skydance Media, under his leadership, acquired Paramount Global last year for $8 billion.

“Uniting these renowned studios, our streaming platforms, and the exceptional talent behind them will deliver greater value to audiences, partners, and shareholders. We are thrilled about the future,” Ellison said in a statement.

Ellison continued to pursue Warner Bros. Discovery’s assets even after the company reached a $72 billion agreement with Netflix. Warner Bros. Discovery declined several offers from Paramount Skydance before Ellison increased the bid from $30 to $31 per share on Thursday.

In a dramatic turn, Netflix announced it would not match Paramount Skydance’s latest proposal. Netflix co-CEOs Ted Sarandos and Greg Peters stated that the deal was attractive only at the right price, not at any cost.

Financial Details and Reactions

Despite stepping away, Netflix will receive a $2.8 billion termination fee from Paramount Skydance, as disclosed in a filing with the Securities and Exchange Commission.

David Zaslav, president and CEO of Warner Bros. Discovery, expressed satisfaction with the outcome for both shareholders and the broader entertainment sector.

“Our main goal throughout this process was to secure a deal that maximizes the value of our iconic assets and historic studio, while providing certainty for our investors,” Zaslav commented. “We look forward to collaborating with Paramount to complete this landmark transaction.”

Looking Ahead

Paramount Skydance has not yet revealed specific plans for integrating its assets with those of Warner Bros. Discovery. For instance, it remains uncertain whether CNN and CBS News, owned by Paramount, will be merged into a single news entity.

Former President Donald Trump, who previously suggested he might comment on the deal, told NBC News in February that he would not be involved. However, last week, he warned Netflix of consequences if it did not remove board member Susan Rice, a former Biden administration official.

Trump has not issued any public statements regarding the finalized agreement between Warner Bros. Discovery and Paramount Skydance.

This week, both Ellison and Sarandos were in Washington, D.C. Ellison attended the State of the Union address as a guest of Senator Lindsey Graham, while Sarandos met with White House staff on Thursday.

Meanwhile, many employees in Hollywood are preparing for changes under Ellison’s leadership.

This article was originally published on NBCNews.com.