Paramount Skydance entered into a definitive agreement on February 27, 2026, to acquire Warner Bros. Discovery in an all-cash transaction valued at $110 billion in enterprise value, creating one of the largest media conglomerates in the United States. The deal values Warner Bros. Discovery equity at $81 billion, with Paramount paying $31 per share in cash for all outstanding shares.
The agreement follows Netflix's withdrawal from a competing bid earlier in February 2026. Post-closing, the combined entity will operate under the Paramount Skydance name and maintain dual headquarters in New York and Los Angeles.
Deal Structure and Valuation Metrics
The transaction is structured as an all-cash acquisition at $31 per share, representing a 42% premium to Warner Bros. Discovery's closing price on February 26, 2026. The $110 billion enterprise value breaks down as follows:
| Component | Value |
|---|---|
| Equity Value | $81 billion |
| Assumed Net Debt (WBD, as of Dec. 31, 2025) | $38.7 billion |
| Total WBD Debt (Dec. 31, 2025) | $41.5 billion |
| WBD Cash (Dec. 31, 2025) | $2.8 billion |
| Additional Transaction Costs & Financing | Remaining balance |
| Enterprise Value (Total) | $110 billion |
The combined company is projected to generate $54 billion in annual revenue based on 2025 pro-forma figures from both entities.
Debt Load and Financing Plan
The merged entity will carry approximately $79 billion in net debt upon closing. Paramount Skydance plans to finance the acquisition through a three-part structure:
Post-closing leverage is expected to reach 4.8x net debt to adjusted EBITDA, with management projecting deleveraging to 3.5x within 24 months through free cash flow generation and non-core asset divestitures.
Warner Bros. Discovery carried $41.5 billion in total debt and $2.8 billion in cash at the end of 2025, with an existing net leverage ratio of 4.1x adjusted EBITDA.
Strategic Rationale and Expected Synergies
Paramount Skydance projects $2.8 billion in annual run-rate cost synergies within three years of closing, primarily from:
- Elimination of duplicative overhead across both organizations
- Consolidated content licensing and global distribution networks
- Combined advertising sales operations
- Shared technology infrastructure across streaming platforms
The combined entity will control approximately 30% of U.S. domestic theatrical box-office market share based on 2025 data, owning major franchises including Star Trek, Mission: Impossible, Top Gun, DC Comics properties, and HBO's premium content libraries.
Combined Streaming Footprint
The transaction will also create the second-largest U.S. streaming subscriber base behind Netflix, with Paramount+ and Max combining for approximately 210 million global subscribers as of Q4 2025.
Regulatory and Shareholder Approval Path
The deal requires approval from antitrust regulators in the United States and several international jurisdictions, as well as a majority vote of Warner Bros. Discovery shareholders. The companies expect regulatory clearance by mid-2026, with a shareholder vote planned for April or May 2026.
No breakup fee was disclosed in the initial announcement, though standard provisions are expected in the definitive merger agreement.
Market Reaction on February 27, 2026
Warner Bros. Discovery shares rose 18.4% to close at $29.80 on February 27, 2026, approaching but not yet reaching the $31 offer price — a gap that typically reflects residual deal-close risk in the minds of arbitrageurs.