Gulf region funds agree to support Paramount's $81 billion acquisition of Warner

Funding commitments from Middle East institutions will help the Ellison family share the acquisition costs

According to people familiar with the matter, Paramount has received equity commitment letters totaling nearly $24 billion, signed by three sovereign wealth funds led by Saudi Arabia, to support its acquisition of Warner Bros. Discovery.

In the Paramount deal led by David Ellison, son of Larry Ellison, co-founder of Oracle and a billionaire, the Saudi Public Investment Fund (PIF) has agreed to provide roughly $10 billion in funding.

People familiar with the matter said the investors also include the Qatar Investment Authority (QIA) and Limad Holding, Abu Dhabi-based.

As these Middle East funds reached funding agreements, the region was facing escalating economic and political turmoil amid the war between the United States, Israel, and Iran. In February this year, Paramount announced it would acquire Warner Bros. Discovery, which owns assets such as HBO, CNN, and Harry Potter, for $81 billion. The transaction is currently undergoing regulatory scrutiny in Europe, and another person familiar with the matter said Paramount executives have told employees they are preparing to close as early as the end of July.

The Middle East investors’ funding commitments will help the Ellison family, and also Bird Capital Partners, which supports the deal, share the costs. Paramount has said that as part of the transaction, even if any issues arise with the equity offering, the deal will not be affected, because the Ellison family has committed to fully backstop it if necessary.

A person familiar with the matter said the Middle East investors will have no voting rights in the new Paramount–Warner combined entity, and the deal is also not expected to trigger a mandatory review by the U.S. Committee on Foreign Investment (CFIUS). Because each institution holds less than 25% of the shares of the combined company, executives believe the funds’ participation will also not trigger review by the U.S. Federal Communications Commission (FCC).

Paramount previously disclosed that three sovereign wealth funds have committed to fund about $24 billion for its acquisition offer. Paramount initially launched a hostile takeover of Warner, but Warner had already chosen to enter a sale agreement with Netflix. After months of standoff, Paramount raised its bid and ultimately beat Netflix to successfully acquire Warner.

Paramount’s original acquisition proposal also had support from Tencent, a Chinese company, as well as Affinity Partners, a private equity firm founded by Jared Kushner, the son-in-law of former President Trump. People familiar with the matter said Affinity Partners later pulled out of the deal, and Tencent is no longer involved either.

Paramount also received $54 billion in debt financing commitment provided by Bank of America, Citigroup, and private equity firm Apollo Global Management, and it is currently beginning to distribute the loan to other banks and investors. If debt is included, Paramount’s total implied valuation for the Warner deal is $110 billion.

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责任编辑：郭明煜