Paramount Skydance Takes Control of Warner Bros Discovery
Paramount Skydance finalised its acquisition of Warner Bros Discovery on Tuesday, effectively consolidating Warner Bros, HBO, and CNN with Paramount Pictures, CBS, and Paramount+. The deal values WBD at approximately $81 billion in equity terms and around $110 billion when including debt, resulting in the formation of a new media entity known as Skydance Corporation. The agreement concludes a protracted competition that initiated with WBD’s intention to bifurcate, attracted the interest of Paramount and Netflix, and culminated in Paramount increasing its bid until Netflix opted not to counter it. In 2018, AT&T acquired Time Warner. Three years later, it consented to merge WarnerMedia with Discovery, resulting in the formation of WBD in 2022. The newly formed entity combined Warner Bros and HBO with Discovery’s television networks, while also confronting the inherent challenges of traditional media: a downturn in linear television viewership and the escalating expenses associated with streaming services. Paramount was encountering similar pressures. CBS and Viacom, having separated in 2005, rejoined forces in 2019 under the name ViacomCBS, subsequently rebranding to Paramount Global in 2022 as the firm advanced its Paramount+ initiative. Skydance Media, established by David Ellison in 2010, subsequently became integral to Paramount. The production company collaborated with Paramount on films such as Mission: Impossible and Top Gun: Maverick. In August 2025, Skydance Media and Paramount Global finalised their merger, resulting in the formation of Paramount Skydance Corporation, with David Ellison assuming the roles of chairman and chief executive.
In June 2025, WBD disclosed intentions to divide into two distinct entities. One would encompass the studios of Warner Bros, DC Studios, HBO, HBO Max, along with its film and television libraries. The other, Global Networks, would encompass CNN, TNT Sports, Discovery, and various other traditional television and digital assets. The objective was to distinguish enterprises with varying growth potential. The proposed break-up also rendered WBD more attractive for potential buyers. The most valuable asset was its studios and streaming operations, encompassing Warner Bros, HBO, and HBO Max. Netflix sought to acquire those assets. Paramount sought to acquire the entirety of the company, encompassing CNN, Discovery, and its conventional television networks. Paramount initiated the initial substantive engagement. Its initial proposal in September 2025 implied approximately $19 per WBD share. WBD has declined the proposal. Paramount returned with offers of approximately $22 and subsequently $23.50 per share. By November, additional bidders had emerged, including Netflix. Netflix expressed interest in acquiring Warner’s studios, which encompass HBO and its streaming operations, including Warner Bros’ film and television divisions, as well as HBO and HBO Max. Netflix possessed the global streaming platform. What it lacked was a Hollywood studio and one of the industry’s most extensive collections of high-quality content. Warner could provide both.
In November, four parties put forth their preliminary bids. Paramount proposed an acquisition of the entire company at an implied valuation of $25.50 per share. Netflix has put forth a proposal to acquire Streaming & Studios following the separation of Global Networks, with an initial offer suggesting a valuation of $27 per share. On December 5, 2025, Netflix and WBD disclosed a definitive agreement. Netflix would acquire Warner Bros’ film and television studios, HBO and HBO Max following the separation of Global Networks. The deal was valued at $27.75 per WBD share, translating to approximately $72 billion in equity value and $82.7 billion in enterprise value, which encompasses the company’s total worth including debt. Three days later, Paramount initiated a $30-per-share all-cash tender offer directed at WBD shareholders. A tender offer enables a buyer to engage directly with shareholders, bypassing the necessity of obtaining a recommendation from the target board for the transaction. WBD initially dismissed Paramount’s proposal and supported Netflix, highlighting the greater certainty associated with that transaction. Paramount’s proposal encompassed a more intricate financing framework and significant leverage.
Paramount continued to elevate the stakes. In February 2026, it proposed a cash offer of $31 for each WBD share. It also proposed to cover Netflix’s $2.8 billion termination fee and suggested a $7 billion regulatory termination fee. On February 26, Netflix announced that it would not increase its offer, stating that aligning with Paramount’s price would render the deal financially unappealing. Here, the bidding war had concluded. On February 27, Paramount Skydance and WBD entered into a definitive merger agreement, valuing WBD shares at $31 in cash. The agreement assessed WBD’s equity at approximately $80.9 billion at the time of signing, with an enterprise value nearing $110 billion. Paramount has also consented to remit a termination fee of $2.8 billion to Netflix. The transaction subsequently encountered regulatory hurdles. The US Department of Justice concluded its antitrust investigation in June, determining that the transaction was unlikely to adversely affect competition in streaming, traditional scheduled television channels, or theatrical film production and distribution.
In July, a coalition of 12 US states, spearheaded by California, initiated legal action, contending that the merger would diminish competitive dynamics. The Writers Guild of America additionally contested the transaction. In September, Paramount reached a settlement with the states. It has committed to investing a minimum of $1.5 billion in domestic film production over a five-year period, establishing a fund of $47.5 million for impacted workers, ensuring a baseline theatrical film output, and creating a News Editorial Independence Board that will oversee CBS News and CNN. A federal judge sanctioned the settlement on September 30. The transaction was finalised on October 6. WBD shareholders received $31.01666668 per share, and WBD shares ceased trading on Nasdaq as the combined entity commenced trading on the New York Stock Exchange. Skydance now unites Warner Bros with Paramount Pictures, HBO alongside Paramount+, HBO Max in conjunction with Pluto TV, CNN paired with CBS News, CBS in collaboration with Warner Bros Television, TNT Sports alongside CBS Sports, and Discovery’s global networks with the respective film and television libraries of these companies. Its franchises encompass Harry Potter, DC, Game of Thrones, Mission: Impossible, Top Gun, Star Trek, and SpongeBob SquarePants.
