Mega-merger in sight in Hollywood with the acquisition of Warner Bros Discovery by Paramount Skydance

It’s the end of a long-running battle with Netflix. The American television and cinema group Paramount Skydance will take over its competitor Warner Bros Discovery (WBD), valued at $110 billion (including debt), it announced this Friday. However, this proposal must still be validated by the shareholders of Warner Bros Discovery and the regulatory authorities.

The new entity will include the Hollywood studios Warner Bros and Paramount, as well as the 24-hour news channel CNN and the streaming services HBO Max and Paramount+, according to a press release.

Such a merger “would create a sufficiently large entity with the necessary assets to become a viable player in the global streaming market, while offering significant cost reduction opportunities,” UBS analysts point out in a note.

A great day on the stock market

Thanks to the prospect of the acquisition of Warner Bros Discovery, Paramount Skydance had an excellent day on the stock market this Friday. PSKY shares soared 20.84% ​​to $13.51 on Wall Street. Such a gain had not been observed since the summer.

Netflix, which threw in the towel by refusing to raise its offer to align with that of Paramount Skydance, was also sought after by investors. The latter welcome “a disciplined way to avoid regulatory pitfalls, massive debt and unwanted inherited assets”, underline the analysts at Briefing.com.

Its stock jumped 13.75%, “reflecting relief that management had avoided what many feared would become a costly and disruptive mega-merger,” they added.

The company will also receive $2.8 billion in termination fees, paid by Paramount Skydance, also notes Matthew Dolgin, analyst at Morningstar.

Warner Bros Discovery saw its title lose 2.19% this Friday. Since he became the subject of these takeover desires, his stock has doubled.