Paramount and Warner Bros. Discovery Secure Landmark $110 Billion Agreement

In a groundbreaking move that is set to redefine the entertainment landscape, Warner Bros Discovery has entered into a monumental merger with Paramount Skydance. This alliance marks one of the most significant transformations within the industry in recent times.

The merger agreement stipulates that Paramount will purchase all outstanding shares of Warner Bros Discovery at a price of $31.00 per share in cash, as detailed in an official news release. This strategic move has been unanimously approved by the board of directors from both companies, signaling a unified vision for the future.

This announcement follows a protracted bidding war, with Paramount ultimately emerging victorious in the race to acquire the legendary Warner Bros. The competition saw Netflix as a formidable contender, though they eventually withdrew from the bidding last Thursday. Their interest lay in gaining control of the prestigious film studio and its expansive library of cinematic works.

In a statement, Netflix expressed their rationale for stepping back, emphasizing their commitment to financial prudence. “We have always been disciplined, and with the price needed to match Paramount Skydance’s latest offer, the acquisition no longer remains financially viable for us,” they stated. “This transaction was always a ‘nice to have’ at the right price, rather than a ‘must have’ at any cost.”

“We’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive,” Netflix said in a statement. “This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”

Warner Bros. Discovery Chief Revenue and Strategy Officer Bruce Campbell told employees the deal was finalized following Netflix’s decision.

The potential impact is being closely watched in Burbank, where Warner Bros. Studios has long been a major employer. Patrick Prescott, the city’s community development director, said the situation remains fluid.

“We thought it was a done deal with Netflix, and now it’s not. So, we’ll wait and see how this deal pans out. In the mean time, Burbank is open for business. You know we just welcomed Hallmark Media into the city of Burbank. That’s 250 additional jobs, so there’s still a market here for media,” Prescott said.

Prescott said Warner Bros. has been a significant economic driver for the city and expressed hope that a merger would not change that role.

“Besides the jobs … they feed into our hospitality, hotels, restaurants, retail, and all the supplies they need to do production and all the businesses here are peripheral to them and support them,” he said.

Paramount wants it all: Movies, cable networks and news. Dominic Patten, senior editor at Deadline, said the bidding reflected an aggressive approach driven by Paramount’s leadership.

“The main thing I think to take away from this is the sheer force Ellison brought to this, which was very much that Silicon Valley attitude of just go fast and break things, get what you want and at whatever price you have to,” Patten said.

Industry analysts say the merger could also reshape the streaming landscape, with the potential to combine HBO Max and Paramount+ in an effort to better compete with streaming giant Netflix.

The proposed merger will require approval from the U.S. Department of Justice and is already under review in California. Attorney General Rob Bonta said the state is closely examining the deal.

“Paramount/Warner Bros is not a done deal. These two Hollywood titans have not cleared regulatory scrutiny – the California Department of Justice has an open investigation, and we intend to be vigorous in our review,” Bonta said.

Almost 10 years ago, Hollywood’s big six became the big five when Disney bought most of 20th Century Fox. Now the big five looks like it’s destined to become the big four, including Universal and Sony, and the business of Hollywood moviemaking is one again in a time of profound transition.

ABC News and The Associated Press contributed to this report.