A $110bn deal closes: Warner Bros merger
Paramount completed its $110 billion acquisition of Warner Bros Discovery on Tuesday, creating a combined company called Skydance in one of the biggest entertainment mergers of all time.
The deal puts two major streaming platforms, Paramount+ and HBO Max, under one roof, along with networks including CBS, CNN, MTV, TBS, Comedy Central and Food Network. Skydance also gains control of major franchises such as The Lord of the Rings, Game of Thrones, the DC Universe and Yellowstone.
The merger places one of the world’s largest entertainment studios under the control of David Ellison. Just last year, Ellison completed his merger of Skydance Media with Paramount, and has been rapidly increasing his influence in Hollywood. The Ellison family is Skydance’s largest shareholder, backed by the fortune of Larry Ellison, David Ellison’s father and co-founder of Oracle.
“Today is a historic day, not just for Skydance but for our entire industry,” Ellison said in a statement. “From the start, our ambition was to bring these two storied studios together and create a stronger competitor, with the talent, resources, and reach to tell great stories in every genre, on every platform, for audiences everywhere.”
The new combined corporation will have annual revenue of nearly $70 billion, the company said. Skydance Class B shares began trading on the New York Stock Exchange on Tuesday under the ticker symbol SKYD.
The Netflix bidding battle
Paramount announced in February that it would acquire Warner Bros after a bidding battle with Netflix, which had previously reached an agreement to buy Warner Bros’ film and television studios and streaming business, excluding its cable networks.
Paramount sweetened its bid by promising shareholders additional cash if the deal failed to close by a set deadline and agreeing to cover the breakup fee Warner Bros would owe Netflix for ending its existing agreement.
Legal hurdles cleared, layoff fears remain
The completion of the deal came after settlements with a coalition of US states and a Hollywood writers’ union cleared the main legal barriers facing the merger.
In an internal memo, executives hinted at job cuts ahead, citing “difficult decisions” as the company targets $6 billion in cost reductions over three years.
Frequently asked questions
What is the new company called?
The combined company is called Skydance, led by CEO David Ellison, and trades on the NYSE under the ticker SKYD.
How big is the merged company?
The deal was valued at about $110 billion, with the combined corporation reporting annual revenue of nearly $70 billion.
What happened to Netflix’s bid?
Netflix had earlier agreed to buy Warner Bros’ studios and streaming business, but Paramount won the bidding battle and agreed to cover the breakup fee owed to Netflix.
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- Paramount Skydance Wins $111bn Deal as Netflix Backs Out
Originally reported by techcrunch.com.
