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After nearly five months of back-and-forth negotiations, Paramount has finally secured its precious. The company has announced, with Warner Bros. Discovery (WBD), that they have entered into a definitive merger agreement under which Paramount will acquire WBD. The deal aims to create a premier global media and entertainment company focused on expanding consumer choice and empowering creative talent worldwide, as Paramount has claimed in a statement

The announcement, which until recently was widely expected to involve another bidder, has now been confirmed after Netflix deemed the deal “no longer financially attractive” and decided not to increase its offer.

The terms of the final agreement establish that Paramount will pay $31.00 per share in cash for all outstanding shares of WBD. The transaction has been unanimously approved by the Boards of Directors of both companies and is expected to close in Q3 2026, subject to customary closing conditions, including regulatory clearances and approval by WBD shareholders, with a vote expected in the early spring of 2026. In the event the transaction has not closed by September 30, 2026, WBD shareholders will receive a $0.25 per share “ticking fee” for each quarter (measured daily) until closing.

The merger combines companies’ film and television studios, streaming and linear platforms.

David Ellison, Chairman and CEO of Paramount, a Skydance Corporation, shares: “From the very beginning, our pursuit of Warner Bros. Discovery has been guided by a clear purpose: to honor the legacy of two iconic companies while accelerating our vision of building a next-generation media and entertainment company. By bringing together these world-class studios, our complementary streaming platforms, and the extraordinary talent behind them, we will create even greater value for audiences, partners and shareholders — and we couldn’t be more excited for what’s ahead”.

David Zaslav, President and CEO of Warner Bros. Discovery adds: “I’m very pleased with the outcome we achieved for WBD shareholders and the entertainment industry. Our guiding principle throughout this process has been to secure a transaction that maximizes the value of our iconic assets and our century-old studio while delivering as much certainty as possible for our investors. We look forward to working with Paramount to complete this historic transaction”.

Paramount shares merger’s features

Below are the supposed strategic and financial benefits that Paramount expects from its merger with WBD, as shared in its statement.

• Hollywood: They will invest in expanding the creative engines at the core of both WBD and Paramount. They will maintain both studios, strengthening content output to include 15 theatrical feature films per year per studio for their combined platforms and third-party distribution partners. 
• Global Streaming Competitor: They will create a direct-to-consumer platform aimed at delivering greater reach, engagement, and monetization capabilities. 
• Pro-Competition: The combination of Paramount+, HBO Max and Pluto will seek to create a DTC business that expands consumer choice and opportunities for creative talent and labor. 
• The transaction supports a theatrical exhibition and content distribution ecosystem:
  • Each film will receive a full theatrical release, with a minimum 45-day global window before becoming available on paid video-on-demand (VOD), with the intention of extending this to 60–90 days or more to maximize the audience for the most successful releases.
  • Both studios will continue to support a third-party ecosystem by licensing their films and series across their own and third-party platforms, while remaining active buyers of content from third-party studios and independent producers.
  • Following its theatrical run, each film will transition to the current standard home entertainment window, preserving paid video-on-demand prior to availability on subscription streaming services.
  • Paramount will continue to adhere to specific windowing regimes in the geographies in which it operates, including France, where it maintains its windowing commitments. 
• An Attractive IP and Content Portfolio: The combined company will have a film library of more than 15,000 titles and thousands of hours of television programming. It will be home to many franchises, including Harry Potter, Mission: Impossible, The Lord of the Rings, Game of Thrones, the DC Universe, Teenage Mutant Ninja Turtles, Transformers, Star Trek and SpongeBob SquarePants. 
• Sports Rights Portfolio: The merged company will include the NFL, the Olympics, the UFC, the PGA Tour, the NHL, Big Ten and Big 12 Football, NCAA College Basketball, and the Champions League, with the ability to distribute these rights collectively across its platforms. 
• Linear Networks: A complementary portfolio of cable networks spanning entertainment, sports and news, aimed at improving cash flow, unlocking efficiencies and strengthening its ability to manage linear market pressures. It also creates a platform for advertisers through integrated cross-channel sales and activation opportunities. 
• Diverse International Portfolio: A presence in more than 200 countries and territories, including cable and free-to-air networks. 
• Technology Focused on Infrastructure and User Interface: By streamlining the technological foundation underpinning every aspect of the combined company’s businesses, it will work to improve the user experience, generate financial and operating efficiencies and eliminate redundancies. 
• Positioned to Invest in Growth: The pro forma balance sheet and cash flow will enable continued investment in growth initiatives, as demonstrated by the deals announced by Paramount since the close of the Skydance merger, including Trey Parker and Matt Stone of South Park, the UFC, the Duffer Brothers and Activision, among others. The combined company’s resources and the backing of Paramount’s committed investors will support increased investment in content generation, revitalizing the media industry and strengthening competition for the benefit of talent and labor.

Conference Call and Webcast

Paramount will conduct a conference call and webcast on Monday, March 2 at 8:30am ET to discuss its merger agreement with WBD. The webcast link and dial-in information will be made available on Paramount’s Investor Relations homepage at ir.paramount.com prior to the call. An audio replay of the call will be available in the Events and Webcasts section of Paramount’s Investors homepage.

Transaction Highlights

Paramount will acquire 100% of WBD for $31 per share in cash, plus the “ticking fee”, valuing WBD at $81 billion in equity value and $110 billion in enterprise value. Paramount expects that the acquisition will yield over $6 billion in synergies, which are driven by a combination of: technology integration (such as migrating the combined company to a single enterprise resource planning system and consolidating streaming technology stacks), corporate-wide efficiencies, including procurement savings, optimizing the combined real estate footprint, and otherwise streamlining operational efficiencies.

On a fully synergized basis, this values WBD at 7.5x 2026 EBITDA. At closing, the company expects to have a net debt-to-EBITDA of 4.3x on a synergized basis, with a clear path to investment grade credit metrics within three years of closing.

The transaction is funded by $47 billion in equity, fully backed by the Ellison Family and RedBird Capital Partners. At closing, the equity may include other strategic and financial partners. Under the terms of the equity commitments, new shares of Class B Paramount stock will be issued at a price of $16.02 per share. The terms of this equity investment were decided by a Special Committee of the Board of Directors of Paramount comprised of independent directors with independent legal and financial advisors. In addition to the new cash equity investment, the transaction is backed by $54 billion of debt commitments from Bank of America, Citigroup, and Apollo, which includes $15 billion to backstop WBD’s existing bridge facility and $39 billion of incremental new debt. The $54 billion excludes $3.5 billion of bridge financing from these institutions to backstop our existing $3.5 billion revolving credit facility.

In addition, existing Paramount stockholders will have the opportunity to participate in a rights offering of up to $3.25 billion of Class B Paramount stock alongside the new equity investment, which is expected to occur nearer the closing date, at a price of $16.02 per share.

The proposed transaction between Paramount and WBD is not subject to any financing conditions.

In connection with the entry into the merger agreement, Paramount has terminated its all-cash tender offer to acquire all outstanding shares of WBD.

Centerview Partners LLC and RedBird Advisors are acting as lead financial advisors to Paramount, and Bank of America Securities, Citi, M. Klein & Company and LionTree Advisors are also acting as financial advisors. Cravath, Swaine & Moore LLP and Latham & Watkins LLP are acting as legal counsel to Paramount. Latham & Watkins LLP is also acting as legal counsel to the investor consortium, including the Ellison Family.

Allen & Company, J.P. Morgan and Evercore are serving as financial advisors to WBD and Wachtell Lipton, Rosen & Katz and Debevoise & Plimpton LLP are serving as legal counsel.

Barclays Capital are acting as financial advisors to the Special Committee of the Board of Directors of Paramount and Cleary, Gottlieb, Steen & Hamilton LLP are serving as legal counsel.