Paramount Secures Gulf State Funding for WBD Acquisition Deal

Paramount Skydance is on the verge of securing funding from three Gulf nation sovereign wealth funds to facilitate its acquisition of Warner Bros. Discovery (WBD). A recent report from the Wall Street Journal indicates that the company is pursuing equity commitments close to $24 billion.

Funding Breakdown

Saudi Arabia’s Public Investment Fund has committed approximately $10 billion to the deal. The investment discussions also include the Qatar Investment Authority and Abu Dhabi’s L’imad Holding Co., with an agreement expected to be finalized soon.

Political and Regulatory Landscape

This development comes amid concerns voiced by Democratic lawmakers regarding foreign control. They have urged Federal Communications Commission (FCC) Chairman Brendan Carr to conduct a thorough review of the proposed $81 billion merger. The lawmakers cited provisions in the Communications Act that restrict foreign entities from owning more than 25% of a licensed U.S. company without FCC approval.

Despite these concerns, Paramount insists that the merger does not fall under the purview of the Committee on Foreign Investment, explaining that the Gulf investors will not exert governance over the company.

Changing Backers

Previously, Paramount’s bid had the backing of Chinese tech giant Tencent and Jared Kushner’s Affinity Partners. However, these parties have withdrawn from the transaction, primarily due to worries about triggering Foreign Investment reviews.

Additional Support and Insights

In addition to Gulf state funding, Paramount Skydance is supported by RedBird Capital Partners, Bank of America, Citigroup, and Apollo Global Management. The backing from these investors is crucial for Paramount Skydance’s chair and CEO, David Ellison, and his father, Larry Ellison, co-founder of Oracle.

Upcoming Actions

The situation is particularly dynamic, coinciding with ongoing conflicts in the region, including the U.S.-Israeli tensions concerning Iran. In a related development, WBD has scheduled a special shareholders’ meeting on April 23 to vote on the merger with the newly formed Paramount Skydance entity.

This acquisition is also undergoing regulatory review across Europe, and reports suggest that Paramount executives have advised employees to brace for a potential completion of the deal by the end of July.