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Middle East Funds Back Paramount's $24B Warner Deal
6 Apr
Summary
- Paramount secured nearly $24 billion in equity commitments.
- Saudi Arabia's PIF is the lead investor with $10 billion.
- The deal is pending European regulatory review, expected by July.
Paramount has secured substantial financial backing for its proposed acquisition of Warner Bros. Discovery, receiving equity commitments nearing $24 billion. These crucial funds originate from three sovereign-wealth funds, with Saudi Arabia's Public Investment Fund leading the investment with approximately $10 billion. Qatar Investment Authority and Abu Dhabi's L'imad Holding Co. have also made separate financial commitments to support the deal.
The agreements with the Middle Eastern investors are a significant step toward finalizing Paramount's $81 billion bid for Warner Bros. Discovery. The transaction, which includes popular entertainment assets like HBO and CNN, is currently undergoing review by European regulators. Paramount executives anticipate the deal could be finalized by the end of July, provided regulatory approval is obtained.
This infusion of capital from Gulf investors is designed to offset costs for Paramount and its partners, including RedBird Capital Partners. Paramount has assured that these equity syndication efforts will not jeopardize the transaction's completion, with assurances that the Ellison family would cover the full amount if necessary. The Gulf investors will not hold voting rights in the merged entity, and Paramount anticipates no mandatory reviews by the Committee on Foreign Investment in the U.S. or the Federal Communications Commission due to ownership stakes.
Earlier, Paramount had disclosed the commitment from three sovereign-wealth funds for $24 billion. The company had initially launched a hostile bid for Warner, which had previously agreed to a sale with Netflix. After a period of negotiation and competitive offers, Paramount emerged successful by increasing its bid. An earlier version of Paramount's offer had included backing from China's Tencent and Affinity Partners, founded by Jared Kushner, but both entities have since withdrawn from the deal. In parallel, Paramount has also secured $54 billion in debt commitments from financial institutions including Bank of America, Citigroup, and Apollo Global Management.
