Paramount nears $24b Gulf backing for Warner deal

Paramount Skydance is in talks to secure nearly US$24 billion from three Gulf sovereign wealth funds led by Saudi Arabia to help back its planned US$110 billion takeover of Warner Bros Discovery.

The deal values Warner Bros Discovery’s equity at US$81 billion, and the companies expect to close it in Q3.

Saudi Arabia’s Public Investment Fund has agreed to provide around US$10 billion, while the other potential backers include Qatar Investment Authority and Abu Dhabi’s L’imad Holding.

The investors would not get voting rights in the combined company, and Paramount executives do not expect their involvement to trigger reviews by CFIUS or the FCC.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

Paramount’s Gulf funding is a tactic in a wider bidding war with Netflix

The bid answers a competing offer from Netflix for Warner Bros. Discovery’s (WBD) studio and streaming assets 1.
Gulf sovereign wealth funds contribute US$24 billion, which exceeds the roughly US$12 billion pledged by the Ellison family leading the bid 1.
WBD’s board raised concerns about leaning so heavily on foreign money for the financing package 1.
Oracle founder Larry Ellison backed the financing with a US$40.4 billion personal guarantee, while the family kept its direct equity investment unchanged 1.

The deal’s structure could draw scrutiny under U.S. foreign investment rules

Paramount executives expect clearance, yet analysts still see a real chance of review for a Paramount-WBD combination that includes CNN and draws large Middle Eastern sovereign wealth fund funding 1.
Even without voting rights, the Committee on Foreign Investment in the United States (CFIUS) can review some non-controlling stakes. CFIUS rules also define “sensitive personal data” so a U.S. business may fall under review if it collects or maintains covered data on at least 1 million individuals, among other criteria 2.
The transaction puts a spotlight on how U.S. regulators handle large sovereign wealth fund stakes in culturally sensitive media assets 1.
CFIUS could require mitigation steps or send the deal to the President, which could reshape other acquisitions of U.S. companies that rely on state-backed capital 3.