Paramount Skydance Corp. (NASDAQ:PSKY) is in talks to secure a massive $24 billion in equity commitments from three Gulf sovereign-wealth funds to support its takeover of Warner Bros. Discovery Inc. (NASDAQ:WBD).
The Saudi Arabia-led consortium, which includes the Qatar Investment Authority and Abu Dhabi’s L’imad Holding Co., is expected to finalize the agreements by next Monday. Saudi Arabia’s Public Investment Fund alone is set to contribute approximately $10 billion of the total amount, reported the Wall Street Journal on Sunday.
This financial backing is aimed at reducing the load for Paramount’s David Ellison and RedBird Capital Partners, both of whom are also backing the deal. Paramount has confirmed that the equity syndication won’t affect the transaction’s closure, with the Ellison family ready to cover the full amount if needed.
The Gulf investors, however, will not have voting rights in the new Paramount-Warner entity. The deal is unlikely to trigger mandatory reviews by the Committee on Foreign Investment in the U.S. (CFIUS) or the Federal Communications Commission (FCC), as each party will hold less than a 25% stake in the combined company.
Paramount Skydance did not immediately respond to Benzinga’s request for comment.
Senate Flags Foreign Funding Concerns
This development comes amid several Senate Democrats’ calls for a rigorous FCC probe into the foreign funding from China and Gulf states behind the Paramount-Warner Bros. merger. They raised concerns that these foreign investors could still exert indirect influence over CNN’s editorial direction and business strategy, despite Paramount’s assurances that the investors would hold no governance rights.
Paramount had earlier mentioned about $24 billion from three sovereign wealth funds for its bid, but early backers Tencent Holdings (OTC:TCEHY) and Affinity Partners, backed by President Donald Trump‘s son-in-law Jared Kushner, later withdrew and are no longer involved.
Price Action: Over a year-to-date basis, Paramount stock declined 27.77%, while Warner Bros fell 4.17%, as per data from Benzinga Pro.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a Benzinga editor.
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