Yesterday, Warner Bros shareholders approved Paramount's $111bn takeover but a lot has happened before this approval. Let's try to understand the entire saga.
๐ ๐ ๐ฒ๐ฟ๐ด๐ฒ๐ฟ ๐๐ต๐ฎ๐ ๐ฑ๐ถ๐ฑ๐ปโ๐ ๐ฑ๐ฒ๐น๐ถ๐๐ฒ๐ฟ
- WBD was created in 2022 with big ambitions, combining HBOโs premium storytelling with Discoveryโs scale.ย
- But the reality was harsher. The company carried over $43B in debt and its stock lost more than 60% of its value by 2025 .
- To manage this, WBD undertook aggressive cost-cutting and restructuring operations. But while its studios and streaming business held strong value, its cable networks were steadily declining.
- This led to a crucial decision of splitting the business and make it more attractive for potential buyers.
๐ง๐ต๐ฒ ๐ฏ๐ถ๐ฑ๐ฑ๐ถ๐ป๐ด ๐๐ฎ๐ฟ ๐ฏ๐ฒ๐ด๐ถ๐ป๐
- By October 2025, WBD formally opened itself up for sale.ย
- Multiple players entered the race including Netflix, Paramount and Comcast.
- Netflix focused on acquiring only the studios and streaming assets while Paramount aimed for the entire company, including its cable networks.
๐ก๐ฒ๐๐ณ๐น๐ถ๐ ๐๐ฎ๐ธ๐ฒ๐ ๐๐ต๐ฒ ๐ฒ๐ฎ๐ฟ๐น๐ ๐น๐ฒ๐ฎ๐ฑ
- In December 2025, Netflix emerged as the frontrunner with an $82.7B deal, offering $27.75 per share and later even shifting to an all-cash structure.
- The idea was clear to combine Netflixโs global scale with Warner Brosโ iconic content library and HBOโs prestige storytelling.ย
- However, the deal quickly attracted scrutiny. Regulatory hurdles began to surface putting pressure on the approval process.
๐ฃ๐ฎ๐ฟ๐ฎ๐บ๐ผ๐๐ป๐ ๐ฐ๐ต๐ฎ๐ป๐ด๐ฒ๐ ๐๐ต๐ฒ ๐ด๐ฎ๐บ๐ฒ
- While Netflix was negotiating, Paramount stayed aggressive. It launched a hostile all-cash bid, steadily increasing its offer ultimately reaching $31 per share (~$111B).
- But this wasnโt just about price. Paramount strengthened its position with:
1) Strong financial backing including support from Larry Ellison
2) Greater deal certainty through financing guarantees
3) Legal action and a potential proxy fight to challenge WBDโs board
4) Growing support from key shareholders who preferred a higher all-cash deal
๐ง๐ต๐ฒ ๐ง๐๐ฟ๐ป๐ถ๐ป๐ด ๐ฃ๐ผ๐ถ๐ป๐
- In February 2026, after weeks of back-and-forth, WBD reopened negotiations. Paramount submitted its revised offer and the board ultimately deemed it superior.
- Netflix was given a chance to match but chose not to stating the deal was no longer financially attractive.
๐ง๐ต๐ฒ ๐๐ถ๐ป๐ฎ๐น ๐ข๐๐๐ฐ๐ผ๐บ๐ฒ
- February 27, 2026: Paramount signs a $110.9B agreement
- April 2026: Shareholders approve the deal
- Closing expected within 6โ18 months subject to regulatory approvals
- Looking ahead, this could mean the consolidation of major assets โ CBS, HBO, CNN, Paramount and more potentially even merging streaming platforms like Paramount+ and HBO Max.
The political undercurrent around this deal is hard to ignore. Donald Trump stands to benefit from a potential reshaping of media assets like CNN, especially given his long standing criticism of network.