Warner Bros inks USD110b deal with Paramount Skydance: Reuters
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The news: Warner Bros Discovery agreed to be acquired by Paramount Skydance in a USD110 billion ($154.50 billion) deal signed on Friday morning, according to an audio recording of a Warner Bros townhall reviewed by Reuters.
The context: “Netflix had the legal right to match the PSKY [Paramount] offer. As you all know, they ultimately decided not to do that. That then resulted in a signed agreement with PSKY as of this morning. So that’s where everything stands,” Bruce Campbell, Warner Bros’ chief revenue and strategy officer, said in the townhall recording.
The agreement comes after Netflix declined to match Paramount’s sweetened offer of USD31 per share for the entire business, which was deemed superior by Warner Bros to the streaming giant’s USD27.75 per share agreement for its assets.
The deal will create one of the largest film studios in the world and will allow Paramount to strengthen its streaming services with the addition of Warner Bros’ HBO Max.
Paramount launched a hostile takeover campaign for the iconic Hollywood studio late last year after it agreed to be acquired by Netflix. Paramount’s persistent offers saw it revise its bid several times, including adding a USD7 billion regulatory termination fee payable by Paramount in the event the transaction does not close due to regulatory matters, a USD2.8 billion termination fee to end the existing Netflix Merger Agreement as well as a daily ticking fee equal to 25 US cents per quarter from 30 September 2026.
The numbers: Netflix shares climbed as much as 13% as of 2:15pm ET on Friday (6:15am AEDT Saturday), while shares in Paramount surged 23%. Warner Bros was trading down almost 2%.
The source: Reuters
