Paramount Skydance details foreign funding for Warner Bros. Discovery deal
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Paramount Skydance is asking the FCC for advance approval for the foreign backers of its deal to acquire Warner Bros. Discovery to possibly increase their equity stakes or voting control in the company up to 20% at some point in the future, according to a regulatory notice.
Why it matters: The deal, which represents one of the most highly leveraged transactions in history, has significant backing from foreign investors.
- Paramount previously said that the Middle Eastern sovereign wealth funds backing its bid would forgo voting control in order to ensure the deal doesn't trigger any national security concerns.
State of play: The FCC doesn't need to approve the request as a condition for Paramount to close its deal, which is valued at about $111 billion, including debt.
- Paramount is essentially asking the FCC to approve potential changes to its cap table and voting control in the future.
- Last week, WBD shareholders voted overwhelmingly to approve the deal.
By the numbers: According to the filing, foreign funders will own 49.5% of the equity in the combined entity.
- The majority (77.8%) of that funding will come from the Middle East.
- In total, funds from the United Arab Emirates, Qatar and Saudi Arabia will own 12.8%, 10.6% and 15.1% of the total combined company, respectively.
- U.S. backers, including the Ellison family, investment firm RedBird Capital Partners and merchant bank LionTree, will own 50.5% of the combined entity.
Zoom out: Paramount is still awaiting key regulatory approvals from regulators in Europe and the U.K. for the deal to proceed.
- Meanwhile, state attorneys general in the U.S. say they are taking a close look at whether the deal violates antitrust laws.
- Paramount says the deal would be good for consumers. Regulators worry the combination of two giant companies — in particular, two rival movie studios — could impact competition and jobs.
