KUALA LUMPUR – A new report from The Wall Street Journal has sent shockwaves through the media industry, stating that Paramount, backed by tech billionaire Larry Ellison, is preparing a takeover offer for Warner Bros. Discovery (WBD). While no formal bid has been submitted, the news has ignited a surge in WBD's stock price and fueled speculation about a dramatic consolidation in the entertainment world.
According to the report, the proposed deal is being spearheaded by David Ellison, Larry Ellison's son and CEO of Paramount's new parent company, Paramount Skydance. This comes just weeks after Skydance Media completed its acquisition of Paramount Global. The move is seen as an ambitious and rapid effort to build a media empire capable of challenging industry giants like Disney and Netflix.
A $600 Billion Figure?
The reports cite a $600 billion price tag for the deal. They indicate that the transaction, including WBD's existing debt, could exceed a total value of $60 billion. The market capitalization of Warner Bros. Discovery was approximately $40 billion before the news broke, a figure that has since risen sharply. Larry Ellison, co-founder of Oracle, has seen his personal wealth skyrocket in recent days, briefly becoming the world's richest person, which is believed to be a key factor in financing the potential acquisition.
What's at Stake?
The proposed acquisition would merge two of Hollywood's most storied studios and their extensive libraries of content. The combined entity would bring together:
Paramount's assets: The Paramount Pictures studio, the CBS television network, MTV, Nickelodeon, Comedy Central, and the Paramount+ streaming service.
Warner Bros. Discovery's assets: The Warner Bros. film and television studios, the DC Comics franchise, CNN, HBO, and the HBO Max streaming service.
The deal would create a formidable competitor in the streaming wars, combining the subscriber bases of HBO Max and Paramount+. However, it is expected to face intense scrutiny from antitrust regulators, given the immense scale of the merger.
Market Reaction and Future Uncertainties
Following the news, shares of Warner Bros. Discovery soared by nearly 30%, reflecting the market's positive reaction to the potential for a premium offer. Paramount's stock also saw a significant jump.
While the prospect of this mega-merger is generating considerable buzz, sources familiar with the matter caution that a formal offer has not yet been made and the plans could still fall apart. WBD is also in the process of its own restructuring, planning to split into two separate entities, a move that could complicate any potential acquisition.
