Fineacre Securities Limited - WB Discovery, Paramount Apparently in merger talks

SHEUNG WAN, Hong Kong - Dec. 27, 2023 - PRLog -- This week, Warner Bros. Discovery CEO David Zaslav met with Paramount Global CEO Bob Bakish in New York City to explore a potential merger. Axios was the first to report on the conversations.

The market valuation of Warner Bros. Discovery is over $27 billion, while Paramount's is slightly over $10 billion, and the latter is heavily in debt. Shari Redstone, who holds a majority position in Paramount via the holding firm National Amusements, is rumored to be interested in a sale.

The transaction might shake up the entertainment sector and lead to more consolidation, with the two firms likely looking to merge their Paramount+ and Max streaming services in order to compete with Netflix (NFLX) and Disney (DIS).

Warner Bros. Discovery, the $43 billion merger of Warner Media and Discovery, has been on a cost-cutting spree and had a few of victories this year. Aside from market leader Netflix, Max is the only profitable streaming provider.

Barbie, the year's highest-earning picture, was also distributed by the business, making about $1.5 billion at the worldwide box office.

The transaction might provide many benefits for both organizations. Both businesses possess news channels, CBS News from Paramount and CNN from WBD, which may be amalgamated. In addition, Paramount has its own film studio, which could be coupled with Warner Bros. to increase creation of original streaming content.

As of 10:50 a.m. ET Thursday, Warner Bros. Discovery was down 4.7%, while Paramount was down 1.7%.

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