Paramount Is Close to Securing Gulf State Funding for WBD Acquisition, According to Reports
Paramount Skydance Moves Closer to Securing Gulf Funding for Warner Bros. Discovery Acquisition
Paramount Skydance is reportedly on the verge of finalizing a funding deal with three sovereign wealth funds from Gulf nations to support its acquisition of Warner Bros. Discovery. This information was disclosed in a Sunday report by the Wall Street Journal.
According to the report, the company is seeking equity commitments totaling nearly $24 billion, with Saudi Arabia’s Public Investment Fund poised to contribute around $10 billion. Negotiations are ongoing with Qatar Investment Authority and Abu Dhabi’s L’imad Holding Co., and a signed agreement could be in place as early as Monday.
This initiative arises amid concerns voiced by Democratic lawmakers regarding national security implications tied to foreign ownership of the merger. Last month, a cohort of senators urged FCC Chairman Brendan Carr to conduct a thorough review of Paramount’s proposed $81 billion deal, citing potential issues stemming from investments by Arab states. However, Carr has indicated that the FCC’s oversight will be limited, given that the deal does not involve the transfer of ownership of broadcast stations.
In an open letter, Democratic leaders referenced a provision in the Communications Act that restricts foreign entities from owning more than 25% of a U.S. company with a broadcasting license without the FCC’s approval. Paramount maintains that the transaction does not fall under the scrutiny of the Committee on Foreign Investment, as the Gulf investors would not exert governance over the company.
Originally, Paramount’s attempt to acquire Warner Bros. included support from Chinese tech giant Tencent and Jared Kushner’s private equity firm, Affinity Partners. However, both entities have withdrawn their backing, particularly Tencent, amid concerns about triggering a Foreign Investment review.
The likely financial support from Gulf investors will bolster the efforts of Paramount Skydance Chair and CEO David Ellison and his father, Larry Ellison, co-founder of Oracle. Additional backers in the acquisition include RedBird Capital Partners, Bank of America, Citigroup, and Apollo Global Management.
As these negotiations unfold, the broader geopolitical landscape remains tense, particularly in light of ongoing U.S.-Israeli relations with Iran.
In a significant development, Warner Bros. Discovery has scheduled a special meeting for shareholders on April 23 to vote on the proposed sale to the newly merged entity, Paramount Skydance. This step is crucial as the transaction also awaits regulatory review in Europe. According to the Wall Street Journal, executives at Paramount have advised employees to prepare for a potential closing by the end of July.
