Paramount has petitioned the U.S. Federal Communications Commission (FCC) to approve a financing structure for its acquisition of Warner Bros. Discovery that involves a significant share of foreign investment. This was reported by Bloomberg, according to UNN.
Details
The plan involves raising $24 billion from three Middle Eastern sovereign wealth funds, which would grant them approximately a 38.5% stake in the new company. The investors include Saudi Arabia's Public Investment Fund, the UAE-based L'imad 1st, and the Qatar Investment Authority.
Deal Details
Paramount noted that these investors would not have voting rights. Overall, the share of foreign ownership could rise to 49.5%, and the company is also requesting permission for a potential increase of this share to 100% in the future.
"Granting this petition by the Commission will serve the public interest by facilitating increased investment in U.S. television broadcasting, allowing Paramount and its licensees to compete more effectively in the television broadcasting market,"
Context and Risks
The deal to acquire Warner Bros. Discovery is valued at $110 billion. It would bring assets such as the Warner Bros. film studio, HBO, and CNN under unified control.
Warner Bros. shareholders approve Paramount's $81 billion takeover23.04.26, 19:44
At the same time, the FCC must evaluate the deal because it exceeds the threshold for foreign investment in licensed CBS television stations. Some U.S. lawmakers, including Senators Elizabeth Warren and Richard Blumenthal, have called for a national security review of the deal.
Company Position
Paramount emphasized that filing the application with the FCC is a standard procedure and is not a mandatory condition for closing the deal.
Control over the merged company will be maintained by David Ellison, his father Larry Ellison, and partner RedBird Capital Partners through voting shares.
The company also believes the merger will allow for increased content production, despite criticism from some industry workers who fear job cuts.
Paramount raised $49 billion in debt for a $111 billion deal with Warner Bros10.04.26, 02:50