David Ellison firm agrees commitments that paves way for $111bn acquisition
Paramount is set to close its $111bn deal with Warner Bros Discovery after the David Ellison-led firm settled an antitrust lawsuit led by California attorney general, Rob Bonta.
Reports over the weekend suggested a deal was imminent, with Paramount keen to close the acquisition without the need for court action because of a $7m-a-day ticking fee it had promised to pay WBD shareholders.
That payment would have kicked in from 1 October, but Paramount and Ellison are now seemingly on track to wrap up the takeover, after four states that had pushed back against a settlement over the weekend accepted commitments from the Top Gun, Yellowstone and Lioness studio.
Bloomberg and The Wall Street Journal broke the news, with US reports also suggesting that separate lawsuit from the Writers Guild of America (WGA) would included within the broader settlement.
Details of the commitments secured remain unclear, although they are set to revolve around protection for CNN, a period of separation for the WBD and Paramount studios, and a penalty if Ellison reneges on his promise to produce 30 films a year. The WSJ also reported that the enlarged company would not be required to sell off cable networks.
The news follows a tumultuous weekend that saw attempts to settle the action by Bonta - himself under pressure after Paramount threatened to leave California - delayed by states including New York and Connecticut.
The settlement also brings to an end the three-month-old antitrust action from the US states, which came after the Department of Justice approved the deal.
The US states’ action was set to reach court in March, which would have resulted in Paramount paying almost $2bn to WBD shareholders as per its ticking fee promise when it struck the WBD deal.
Ellison claimed in August that the deal would have closed last month had it not been for the action of the US states, with regulatory clearance already in 68 countries.
The greenlight has already been given in the European Union, the UK, Australia, and Canada, among others, with the US states’ action widely seen as the last hurdle for Ellison to overcome.
The landmark acquisition will bring together two of Hollywood’s biggest studios, owners of streamers Paramount+ and HBO Max, as well as numerous production entities and broadcast operations.
Paramount is funding the acquisition using financing from Larry Ellison, father of chief exec David Ellison, with additional funding from Saudi Arabia’s Public Investment Fund (PIF) and the Qatar Investment Authority (QIA).
Paramount landed its acquisition of WBD in February following stiff competition from Netflix, which initially had a deal to buy the HBO owner agreed in late 2025.
However, David Zaslav-led WBD viewed the final Paramount offer - its ninth in total - as superior to Netflix’s offer, with the global streamer choosing not to bid again.
WBD shares were up almost 10% to $30.56 on today’s news, just shy of the $31 that Paramount has agreed to pay. The latter’s shares also rose on the news, up almost 10% to $11.22.
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