Pomegra
Paramount Skydance (PSKY) and Warner Bros. Discovery (WBD) set an Oct. 6 close, with WBD holders receiving $31.02 per share in cash after final court approval.
- The merger closes Oct. 6, with WBD holders paid $31 in cash plus a daily accrual, or about $31.02 per share.
- A judge approved the state antitrust settlement on Sept. 30, clearing the last major hurdle to the roughly $110 billion deal.
- WBD stock will be delisted from Nasdaq, and PSKY moves its listing to the NYSE on or about the same day.
Lead
Paramount Skydance and Warner Bros. Discovery said their merger will close on Oct. 6, ending a process that began with a February agreement. Warner Bros. Discovery shareholders will receive $31 in cash per share. A ticking fee of $0.00277778 per share accrues for each calendar day after Sept. 30, which brings the payout to $31.01666668 per share on an Oct. 6 close. The combined company will own HBO Max, Warner Bros., CNN, Paramount Pictures, CBS, Nickelodeon and Paramount+.What Happens to Warner Bros. Discovery Shareholders?
WBD shareholders receive cash, without interest, for each share they hold at closing, and WBD common stock will then be delisted from Nasdaq and deregistered under the Exchange Act. WBD will no longer file periodic reports with the SEC. Appraisal rights remain available to holders who seek a judicial valuation of their shares.
The ticking fee compensates holders for the time between the original third-quarter target and the actual close. The price of $31 per share was set in the agreement signed on Feb. 27, after Netflix (NFLX) withdrew from the contest for WBD. Paramount agreed to cover the $2.8 billion termination fee owed to Netflix.
For PSKY, the Class B common stock will move from the Nasdaq Global Select Market to the New York Stock Exchange. Trading on Nasdaq ends at the close on or about Oct. 5, and NYSE trading begins at the open on or about Oct. 6.
What Did Paramount Concede to Win Approval?
Paramount agreed to a package of commitments to settle antitrust suits from a 12-state coalition led by California and from the Writers Guild of America. Both suits were filed in July in the Northern District of California and argued the deal would violate Section 7 of the Clayton Act. The states cited reduced competition in theatrical film distribution and in cable channel licensing. The Writers Guild cited reduced competition for writing services.
The state settlement includes the following terms:
- At least 30 theatrical films in 2027 and 2028, and at least 32 a year from 2029 through 2031.
- A 45-day theatrical window for wide releases, and no subscription streaming debut, including on Paramount+, sooner than 90 days.
- At least $300 million a year of additional U.S. film production spending.
- No sale of the Paramount or Warner Bros. studio lots in California for at least five years.
- A five-member editorial independence board for CBS News and CNN, established within 180 days of closing.
The Writers Guild settlement bars writer layoffs at CBS News Broadcast for five years and includes a $17.5 million payment to the guild's health fund, plus attorneys' fees. Judge Araceli Martínez-Olguín approved the state settlement on Sept. 30.
Regulatory Path
Before the lawsuits, Paramount said it had cleared reviews in every jurisdiction that examined the deal, among them the U.S. Department of Justice, the European Union, the United Kingdom, Canada, Australia, Brazil, Mexico and China. The review spanned 68 countries over eight months. The state and guild suits were the last open obstacles. Paramount chief David Ellison had signaled that the company could shift operations out of California if the transaction did not close by Oct. 1, which gave the state negotiators added leverage and time pressure.
How Did the Shares React?
Both stocks closed near their daily highs after the Sept. 30 ruling. WBD, as a cash-deal target, trades close to the payout price, and its movement reflects deal certainty rather than operating results. PSKY has fallen more than 20% since the start of the year while the deal was pending, which reflects investor concern over the size of the acquisition and the debt needed to fund it. Paramount priced about $41.4 billion of debt to finance the transaction.
Strategic Context
The deal combines two of Hollywood's largest studios, two major subscription streaming services and a large cable networks portfolio under a single owner. The core business case is scale in streaming against larger rivals, and cost savings from combining overlapping studio, distribution and corporate operations. The film output and theatrical window commitments limit how far Paramount can shift the combined slate toward streaming-first releases, at least through 2031.
Outlook
The Oct. 6 close removes the final legal barrier and moves attention to integration. Open questions include the pace of cost cuts, the handling of the two streaming services and the formation of the CBS News and CNN editorial board within 180 days. PSKY's NYSE debut and WBD's delisting will mark the formal end of Warner Bros. Discovery as an independent public company.
Mentioned tickers: PSKY, WBD, NFLX
