Paramount to Merge With HBO Max

The all-cash offer from Paramount values Warner Bros. Discovery at an enterprise value of $110 billion and an equity value of $81 billion. Paramount will pay $31.00 per share and has also agreed to cover the $2.8 billion termination fee WBD owed to Netflix from a previous agreement. The deal's financing includes $54 billion in debt commitments from Bank of America, Citigroup, and Apollo. This acquisition thwarted a rival bid from Netflix, which had an $83 billion agreement to acquire WBD's studio and streaming assets while spinning off the linear networks. Paramount's comprehensive offer for the entire company, including its cable channels, was ultimately deemed superior by the WBD board. The transaction is expected to close in the third quarter of 2026, pending regulatory and shareholder approvals. The newly formed media giant is projected to generate over $6 billion in synergies, primarily from non-labor sources like integrating streaming technology stacks and consolidating corporate operations. Combined, the company anticipates 2026 revenues of $69 billion and $18 billion in EBITDA, inclusive of these savings. The new entity will hold a vast content library with over 15,000 film titles and thousands of hours of television, including major franchises like *Harry Potter*, *Mission: Impossible*, and the DC Universe. Despite the projected savings, the high leverage of the deal is a significant concern, with the combined entity's net debt expected to be approximately $79 billion. Fitch has already downgraded Paramount's credit rating to "junk" (BB+), and Moody's has placed the company's ratings under review for a possible downgrade. The company aims to reduce its leverage ratio from a post-merger 4.3x to 3x EBITDA within three years.