- Warner Bros. Discovery will be acquired by Paramount Skydance in a $110 billion deal, announced on Friday.
- It comes after Netflix declined to match Paramount's $31 per share offer, ending the bidding war on Thursday.
- California's attorney general is investigating, though EU antitrust approval is expected easily.
BURBANK, Calif. — Warner Bros. Discovery has agreed to be acquired by Paramount Skydance in a $110 billion deal signed Friday morning, according to an audio clip of a global town hall by the company, which was reviewed by Reuters.
"Netflix had the legal right to match the PSKY 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 town hall.
Paramount and Warner Bros. did not immediately respond to requests for comment.
The agreement caps a bidding war after Netflix declined to match Paramount's latest $31 per share offer, which was deemed superior by Warner Bros. to the streaming pioneer's $27.75 per share agreement for its studio and streaming assets.
"Netflix had the legal right to match the PSKY 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 town hall.
'EU antitrust approval likely not a hurdle'
Paramount is expected to easily win European Union antitrust approval, with any required divestments likely to be minor, Reuters reported on Friday, citing sources.
However, the merger has drawn scrutiny from California state Attorney General Rob Bonta, who said that the state is investigating the Paramount deal and will be "vigorous" in its review. The deal, which includes some $29 billion in debt, is among Hollywood's biggest media shake-ups and will create one of the largest film studios in the world, allowing Paramount to tap Warner's trove of intellectual property, including franchises such as "Fantastic Beasts" and "The Matrix."
It will also allow Paramount to bolster its streaming efforts, with a potential combination of HBO Max and Paramount+, enabling it to gain market share and tussle with market leader Netflix.
Paramount was in pursuit of Warner Bros. since late last year, when it launched a hostile campaign to wrestle the company from the streaming giant by consistently raising its offer.
The company, led by billionaire Larry Ellison's son, David Ellison, enticed Warner's board back to the bargaining table by raising the possibility of an improved cash offer.
In its revised bid, Paramount raised the termination fee it would pay should the deal fail to gain regulatory approval to $7 billion from $5.8 billion.
Paramount also agreed to pay the $2.8 billion termination fee that Warner Bros. owes Netflix.
Activist investor Ancora Holdings, which owns a small stake in Warner Bros., had also stepped up pressure on the HBO owner to engage more with Paramount.
Lawmakers on both sides of the political aisle have raised concerns that any deal to acquire Warner Bros. could result in fewer choices and higher prices for consumers.
Cinema operators are also concerned that combining large Hollywood studios could cost jobs and reduce the number of movies released in theaters.
