Paramount Skydance, the newly formed media conglomerate resulting from an $8.4 billion merger, is reportedly eyeing a significant acquisition: Warner Bros. Discovery (WBD).
Led by CEO David Ellison and backed by his father, Oracle co-founder Larry Ellison, Paramount Skydance is preparing a majority cash bid for WBD. This bid includes all of WBD's assets, including prominent names such as HBO, CNN, DC Studios, and Warner Bros. Pictures. This is noteworthy given WBD's announced plans to separate into two distinct entities – Warner Bros. (studios and streaming) and Discovery Global (cable and networks) by 2026.
The strategic rationale behind this potential acquisition lies in the combined strength of HBO Max and Paramount+. A merger would create a formidable competitor to established streaming giants like Netflix, Disney+, and Amazon Prime Video. Warner Bros. Discovery, under CEO David Zaslav, is undergoing its own restructuring, aiming for operational efficiency and increased shareholder value.
While no formal offer has been submitted, the market reacted swiftly to the news. WBD shares experienced a surge of over 30%, while Paramount’s stock saw a 15% jump. The scale of the potential deal – WBD boasts a market capitalization of nearly $40 billion, significantly larger than Paramount Skydance – highlights the ambitious nature of this potential undertaking.