Paramount and Warner Bros. Unite in $111 Billion Deal

After months of corporate negotiations, competition with Netflix, an antitrust lawsuit and regulatory uncertainty, Paramount and Warner Bros. Discovery have officially completed their $111 billion deal.

The two companies will now operate together under Skydance Corporation, with David Ellison serving as chairman and chief executive officer.

Including Warner Bros. Discovery’s debt, the total value of the transaction stands at $111 billion. The merger brings major entertainment brands including Paramount Pictures, Warner Bros., HBO, CBS, CNN, Comedy Central, MTV and Nickelodeon under the same corporate umbrella, alongside streaming platforms Paramount+ and HBO Max.

How the $111 Billion Deal Happened

The battle to acquire Warner Bros. Discovery began late last year, with Netflix initially emerging as a leading bidder.

In December, Netflix agreed to acquire certain Warner Bros. assets for approximately $82 billion including debt.

Paramount Skydance later entered the race with a competing offer. After its initial proposal was rejected, Paramount increased its bid by another dollar per share.

Warner Bros. Discovery ultimately considered Paramount’s proposal more attractive than Netflix’s offer. Netflix was given an opportunity to raise its bid but decided not to increase its price.

Paramount Skydance then moved forward with its $111 billion proposal.

Antitrust Lawsuit Delayed the Deal

The deal faced another major obstacle when 12 Democratic state attorneys general in the United States filed an antitrust lawsuit challenging the transaction.

The legal and regulatory challenges delayed the completion of the acquisition.

After overcoming those hurdles, Paramount Skydance officially completed the acquisition of Warner Bros. Discovery.

David Ellison described the completion as a historic moment for both Skydance and the wider entertainment industry.

He said the goal from the beginning was to bring two historic studios together and create a stronger competitor with the scale to deliver stories to audiences across platforms worldwide.

$70 Billion in Annual Revenue, Nearly $80 Billion in Net Debt

The new Skydance is expected to generate approximately $70 billion in annual revenue.

However, the company will also inherit nearly $80 billion in net debt, creating significant financial pressure.

Skydance plans to achieve more than $6 billion in annual cost savings over the next three years through technology, operational integration, procurement, marketing and real estate efficiencies.

The cost-cutting plan could also affect employees, with thousands of workers at Paramount and Warner Bros. Discovery potentially facing layoffs in the coming months.

Skydance is also targeting a reduction in its net debt-to-adjusted earnings ratio from roughly seven times in 2026 and 2027 to three times by the end of 2029.

Ellison Family to Retain Control

The Ellison family will hold the largest ownership stake in the new Skydance.

David Ellison’s father, technology billionaire Larry Ellison, has played a major financial role in supporting the acquisition.

The Ellison family and RedBird Capital Partners will hold 100% of the voting rights in the combined company.

The financing includes a $47 billion investment in Class B common stock, backed by Larry Ellison, RedBird Capital Partners, L1?onTree and sovereign wealth funds from Saudi Arabia, Qatar and Abu Dhabi.

Bank of America, Citigroup and Apollo Global Management led the debt financing.

Under the terms of the transaction, Warner Bros. Discovery shareholders received approximately $31.02 in cash per share.

HBO Max and Paramount+ Set to Merge

The new Skydance will operate through three main divisions: Studios, Direct-to-Consumer and TV Media.

The combined company now includes Paramount Pictures, Warner Bros., HBO, HBO Max, Paramount+, Pluto TV, CBS, CNN, CBS Sports, TNT Sports, Nickelodeon, Cartoon Network, MTV, Food Network, BET, HGTV and Comedy Central.

The streaming business is also expected to undergo major changes. Skydance plans to eventually combine Paramount+ and HBO Max into a single streaming service.

A New Hollywood Giant Faces Major Challenges

Under David Ellison, the new Skydance aims to use the combined companies’ massive content libraries, streaming platforms, television networks and global audiences to build a stronger entertainment business.

However, the company will also face major challenges, including a huge debt burden, cost-cutting pressure, potential layoffs and intense competition in the global streaming market.

The $111 billion acquisition marks one of the biggest corporate transformations in Hollywood in recent years.