Warner Bros. Discovery Shareholders Approve Landmark $110 Billion Merger with Paramount Skydance
The deal unites two of Hollywood's "Big Five" studios, combining assets like HBO Max, Paramount+, CBS, CNN, and a vast portfolio of cable channels.
Shareholders of Warner Bros. Discovery (WBD) have voted to approve the company’s acquisition by Paramount Skydance in a blockbuster transaction valued at approximately $110 billion, including debt. The vote, which took place during a special shareholder meeting, paves the way for a merged media behemoth.
In a separate non-binding vote, shareholders rejected proposed compensation packages for outgoing WBD CEO David Zaslav, which could have reached up to $887 million.
Deal Terms
- Share Price: WBD shareholders will receive $31 per share in cash.
- Equity Value: The transaction assigns WBD an equity value of approximately $81 billion.
- Enterprise Value: The deal is valued at approximately $110 billion, including debt.
- Financing: The transaction is backed by $47 billion in equity from the Ellison family and RedBird Capital, including $24 billion from Middle East investors. Debt commitments of $49 billion come from a group of 18 lenders. Combined with WBD’s existing debt of approximately $29 billion, total debt for the combined entity reaches approximately $80 billion.
Shareholder Vote Results
- Merger Approval: Shareholders voted overwhelmingly in favor, with preliminary reports indicating nearly 99% of votes in favor.
- Compensation Rejection: A non-binding vote on CEO compensation was rejected. Approximately 82% of shares were opposed, 17% in favor, and 0.5% abstained. As the vote is non-binding, Zaslav remains eligible to receive the compensation.
Timeline and Next Steps
- Announcement: The merger was announced on February 27.
- Regulatory Approvals:
- The U.S. Department of Justice has already approved the merger.
- Approvals are still required from European Union and UK antitrust authorities.
- California Attorney General Rob Bonta is investigating the deal and may file a legal challenge.
- Expected Closing: Paramount expects the transaction to close in the third quarter of 2026.
- If not closed by September 30, WBD shareholders will receive a "ticking fee" of 25 cents per share per quarter (measured daily) until closing.
Statements
"We appreciate the support and confidence our stockholders have placed in us to unlock the full value of our world-class entertainment portfolio." — WBD Chairman Samuel A. Di Piazza, Jr.
"Today's stockholder approval is another key milestone toward completing this historic transaction that will deliver exceptional value to our stockholders." — WBD CEO David Zaslav
"Shareholder approval marks another important milestone towards completing our acquisition of Warner Bros Discovery... We look forward to closing the transaction in the coming months." — Paramount Skydance Spokesperson
Background
Paramount Skydance initiated its campaign to acquire WBD last fall. After WBD initially accepted an offer from Netflix for its studio-and-streaming unit, Paramount continued with a hostile tender offer. It eventually secured WBD’s acceptance with a $31-per-share cash offer. Netflix received a $2.8 billion termination fee from Paramount Skydance as a result.
Opposition
- Over 4,000 industry professionals, including actors Kristen Stewart, Pedro Pascal, Javier Bardem, Jane Fonda, and Mark Ruffalo, signed an open letter opposing the merger. They cited concerns over job losses, content consolidation, privacy risks, and news bias.
- California Attorney General Rob Bonta is investigating the deal for potential antitrust violations.
- U.S. Senators Elizabeth Warren, Chuck Schumer, and Cory Booker sent a letter urging federal scrutiny of the deal and its foreign financing.
- Senate Democrats have warned David Ellison to preserve records regarding contacts with President Donald Trump.
- Critics argue the merger would consolidate media power and give influence to the Ellison family, which has ties to President Trump.
- A coalition of state attorneys general is reportedly considering a legal challenge.
Support
- AMC Entertainment CEO Adam Aron endorsed the deal, citing David Ellison’s track record.
- Film producer Jerry Bruckheimer stated that final approval is "inevitable."
Future Plans
- Film Releases: David Ellison has committed to releasing 30 films per year across both studios.
- Theatrical Windows: Ellison pledged to keep movies in theaters for at least 45 days and 90 days before moving to subscription video-on-demand (SVOD).
- Content Investment: Ellison has stated the combined company will invest in film, TV, and technology, and has promised increased content spending.
Market Reaction
Following the vote, shares of Paramount fell nearly 6%, and Warner Bros. Discovery shares also declined.
Background on David Zaslav
David Zaslav led Discovery Communications for 15 years before the company merged with WarnerMedia in 2022 in a $43 billion transaction with AT&T. The combined entity has since accumulated significant debt. The current merger with Paramount is led by Paramount CEO David Ellison.
Credit Ratings
Fitch and S&P rate Paramount debt at junk status; Moody’s has it under review for downgrade to junk, citing leverage concerns.