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Paramount Skydance is set to close its roughly $110 billion Warner Bros. Discovery takeover on October 6 after a judge approved a state antitrust settlement.
- The deal is valued at about $110 billion including debt, or $31 per Warner Bros. Discovery share in cash plus a ticking fee.
- A federal judge approved a consent decree with 12 state attorneys general on September 30, clearing the final legal obstacle.
- The combined company is to be renamed Skydance, with $41.4 billion of new secured notes priced to fund the purchase.
Lead
Paramount Skydance (NASDAQ: PSKY) will complete its acquisition of Warner Bros. Discovery (NASDAQ: WBD) on Tuesday, October 6, 2026. The closing follows approval by U.S. District Judge Araceli Martínez-Olguín of a settlement that resolves a lawsuit brought in July by California and 11 other states. The transaction, announced on February 27, values Warner Bros. Discovery at roughly $81 billion in equity and $110 billion in enterprise value. It is the most expensive deal ever completed in the entertainment industry. The combined company is to be renamed Skydance.What Did the Court Approve?
The court approved a five-year consent decree that lifts the blocking order the states had sought and sets binding conduct requirements for the merged studio.
- The company must release at least 30 films a year in the first two years and at least 32 a year in years three through five.
- Each film requires a theatrical window of at least 45 days.
- Missing the minimums triggers a $30 million penalty per film and potential divestiture of the Miramax stake.
- Cable networks must negotiate carriage independently, with divestiture of channels such as BET, VH1 and Comedy Central as the remedy for violations.
- U.S. production spending must rise by at least $300 million above 2025 combined levels.
- Both studio lots must stay operational, and a five-member editorial independence board will oversee CBS News and CNN.
The judge described the settlement as a procedurally sound resolution.
How Is the Takeover Being Financed?
The purchase rests on $47 billion of equity backed by the Ellison family and RedBird Capital Partners, plus debt commitments of $54 billion from Bank of America, Citigroup and Apollo. New Class B shares were priced at $16.02. Paramount Skydance has since priced $41.4 billion of senior secured notes across first-lien, second-lien and euro-denominated tranches, along with incremental term loans. That debt load is several times the company's equity market value of about $10.8 billion.
Paramount has targeted more than $6 billion in synergies, from technology integration, procurement, real estate and operating efficiencies. At that level the price equals 7.5 times Warner Bros. Discovery's 2026 EBITDA. The consent decree limits how quickly those savings can be taken from studio operations and production.
Why Did Paramount Skydance Shares Fall?
Paramount Skydance shares fell about 5% to $9.80 on the day the financing was priced, leaving them down roughly 26% year to date. The decline reflects the size of the new leverage against a small equity base. Warner Bros. Discovery stock was flat at $30.96, just under the $31 cash price, which indicates the market treats completion as a near certainty. Netflix (NASDAQ: NFLX) eased about 2% to $68.34. The SPDR S&P 500 ETF (SPY) slipped 0.2%.
What Changes for Hollywood and Streaming?
The merger combines Paramount Pictures, Warner Bros., HBO, CBS, CNN and two of the larger streaming services, HBO Max and Paramount+. David Ellison leads the merged company. Casey Bloys keeps his role overseeing HBO and streaming content. Cindy Holland, who ran Paramount's streaming business, has left. Workforce reductions are expected as overlapping functions are consolidated. Paramount also agreed to contribute $17.5 million to the Writers Guild-Industry Health Fund as part of the settlement. The merged company will compete for subscribers and advertising with Netflix and the large technology-backed platforms.
Outlook
The closing ends an eight-month process and begins an integration phase constrained by the decree. The company must meet fixed film output, keep both studio lots running and pay down the new debt. Shareholders of Warner Bros. Discovery will receive $31 per share in cash plus the accrued ticking fee. Attention now shifts to the pace of synergy capture, the handling of CNN and CBS News under the independence board, and the transition to the Skydance name.
