Paramount Hostile Takeover of Warner Bros. Closes at $111 Billion

From unwanted suitor to owner

In December 2025, Paramount Skydance launched a hostile takeover bid for Warner Bros. Discovery, offering to buy the whole company. Most analysts expected the fight to end in a stalemate. Ten months later, David Ellison's company owns it. Paramount finalized the purchase on October 6, 2026, and renamed the combined business Skydance Corporation25. The deal ended a campaign that had already beaten Netflix and outlasted a multistate antitrust lawsuit9.

The price is reported in slightly different ways. Most outlets put the deal at about $110 billion to $111 billion once Warner's debt is included1215. One account gives the equity cost as roughly $81 billion, or close to $111 billion with debt9. Another values the company at $110.9 billion at $31 per share25. The differences mostly come down to how each outlet counted debt. Whichever figure you use, this is among the largest media deals ever made.

The path to that outcome shows how a hostile bid really works. It also shows why the most important fight was with regulators, not shareholders.

What a hostile takeover actually is

A takeover is "hostile" when the buyer goes around the target company's board and makes its case directly to shareholders. Paramount did this with a tender offer: a public offer to buy shares from investors at a premium, open for a limited time6. The other common tactic is a proxy fight. In that version, the bidder asks shareholders to vote its own candidates onto the board, and the new board then approves the sale8.

Paramount chose the tender offer. It offered $30 per share in cash for all of Warner Bros. Discovery and said that was a 139% premium over the stock's price in early September 20258. Paramount put the company's enterprise value at $108.4 billion and its equity value at $77.9 billion1. The offer came right after Warner's board had signed a binding agreement with Netflix. That deal would have sold only the studios, HBO and HBO Max for $27.75 per share in cash and stock. It valued those businesses at $82.7 billion including debt3.

The two bids were hard to compare directly. Netflix did not want the cable networks, including CNN, TNT and Discovery. Those would have been spun off into a separate public company called Discovery Global5. Paramount argued that this spinoff was worth about $1 per share. Warner's board treated it as worth much more1. That disagreement over the cable business drove much of the fight that followed.

Why the board kept saying no

Before going public, Paramount had made several private offers. It started at $19 per share in September and moved through $22 and $23.50, and the board rejected each one1. Paramount later said it had made six offers in 12 weeks without the board ever seriously engaging3.

The board's case was about risk, not only price. In January it called the revised offer "inadequate." It compared the bid to a leveraged buyout, because Paramount planned to borrow more than $50 billion to buy a company larger than itself7. The foreign money in the deal also drew attention. Sovereign wealth funds from Saudi Arabia, Qatar and Abu Dhabi supplied about $24 billion. Paramount said those funds had given up governance rights, which in its view kept the deal outside review by CFIUS, the U.S. panel that screens foreign investment for national security risks1.

Paramount answered each objection without raising its price. Larry Ellison personally guaranteed his $40.4 billion equity commitment. Paramount also raised the breakup fee it would pay Warner to $5.8 billion, the same as Netflix's7. Later it promised to pay the $2.8 billion fee Warner would owe Netflix for walking away, and it added a "ticking fee" that would pay shareholders more for every quarter the deal stayed unfinished2. At the time, at least one analyst saw these moves as scattershot. That analyst said Paramount's best hope was regulators blocking Netflix2.

How the hostile bid actually won

The tender offer itself was not what won the fight. Pressure from shareholders was. Activist investors, including Ancora, threatened a proxy contest. Coverage of the deal credits that threat, along with pressure from other shareholders, with pushing Warner to reopen talks25. In mid-February, Netflix gave Warner a seven-day window to negotiate with Paramount23. After a weekend of online talks, Paramount raised its price to $31 per share21. It also agreed to a $7 billion fee if regulators blocked the deal, and it moved up the start of the ticking fee to the end of September22.

On February 26, Warner's board declared the new offer superior. Netflix declined to match it in less than two hours24. Its co-CEOs said the deal had been "a 'nice to have' at the right price, not a 'must have' at any price"22. Investors seemed to agree. Netflix stock jumped more than 10% the next day24. Netflix also collected the $2.8 billion breakup fee, which helped lift its first-quarter earnings21. Warner shareholders approved the Paramount deal on April 2325.

The lesson is that a hostile bid is often less about buying the shares and more about forcing negotiations. Paramount never completed its tender offer. Instead, it kept pressure on the board until the board agreed to a friendly deal.

The antitrust fight

Winning over the board did not make approval simple. The U.S. Justice Department cleared the deal on June 12 without major concessions. According to reports, senior officials approved it over lower-level lawyers who had wanted a broader investigation14. The Ellisons' friendly relationship with the Trump administration was a constant subplot. Critics also questioned whether new ownership would change CNN's coverage42.

The states stepped in where federal regulators did not. On July 13, twelve Democratic attorneys general led by California's Rob Bonta sued under the Clayton Act. They argued the merger would combine two of Hollywood's five major film distributors and two of the five biggest basic-cable channel owners14. The Writers Guild of America filed its own lawsuit the next day14. Judge Araceli Martínez-Olguín issued a temporary restraining order. She found the states had made a strong case that the deal would hurt competition in cable and in movie theater distribution20. She then scheduled a trial for March 2027, much later than the November date Paramount wanted17.

That schedule hurt Paramount. Starting October 1, it would owe Warner shareholders about $7 million a day, or roughly $650 million a quarter17. By one estimate, the total could have reached about $1.3 billion by the end of the trial16. Paramount fought back. It demanded that the states and the WGA post a $1.88 billion bond and floated the idea of moving the company out of California14. California politicians also pushed for a deal. Governor Gavin Newsom and Los Angeles Mayor Karen Bass both urged a settlement, citing jobs14.

A settlement with behavioral, not structural, remedies

The two sides settled on September 2111, and the judge approved the agreement on September 30, the day before the ticking fee would have started13. The deal is a five-year court order. Paramount must release at least 30 films in theaters each year, spend an extra $1.5 billion on U.S. production and set aside $47.5 million for affected workers19. It will pay $30 million for each film it falls short. Missing the film target or bundling its cable channels together in negotiations could force it to sell Miramax or some of its cable channels15. A five-member board will oversee the editorial independence of CBS News and CNN13.

Coverage agrees on the main point: Paramount accepted behavioral rules but not the structural remedies Bonta first sought13. Reports also say the settlement required no major asset sales20. Accounts differ on what that means. Bonta said the agreement resolves the states' concerns in every market in the case19. Paramount's chief legal officer said the turning point was that "there wasn't an antitrust case" at all13. Critics, including the Block the Merger coalition, called the remedies weak. They point out that the Ellisons control who sits on the editorial board19. The WGA said it settled only because it could not afford to fight alone15.

What it means

The clearest reading is that the deal was decided by money and deadlines more than by a judge's ruling. Paramount had a billionaire guaranteeing its financing. That let it outbid Netflix and keep improving its terms until the board gave in. The ticking fee and the threatened bond then gave both sides strong reasons to settle before trial. Investors had already noticed the cost: the price came to nearly 13 times Warner's expected annual earnings, well above Paramount's own valuation24.

Consumers will feel the effects soon. HBO Max and Paramount+ now have the same owner, and Paramount has said it plans to combine them into one global service21. The court order will last five years, with a trustee monitoring compliance15. Whether those rules can protect competition and newsroom independence inside a company this large will be the real test of this merger.