Paramount Global's $28 billion acquisition of Warner Bros. Discovery will close after federal regulators declined to block the deal, ending an 18-month review and creating a media conglomerate that controls HBO, CNN, CBS, Paramount Pictures and the Warner Bros. film and television library.
The combined company will hold roughly 25% of U.S. streaming viewership, according to measurement firm Nielsen, putting it in direct competition with Netflix and Disney+ for subscription dollars. The deal values Warner Bros. Discovery at $28 billion including debt, a figure Paramount agreed to in early 2025.
Paramount CEO David Ellison, son of Oracle co-founder Larry Ellison, will run the merged entity. The company has pledged $2 billion in annual cost savings within three years, a target analysts expect to be met through layoffs and consolidation of overlapping studio operations, cable networks and streaming platforms.
The transaction reshapes an industry that has spent five years bleeding cable subscribers while spending heavily on streaming content. Warner Bros. Discovery carried $40 billion in debt before the deal, a burden that contributed to its decision to sell. Paramount, controlled by the Ellison family and RedBird Capital, absorbed that leverage in exchange for control of one of the largest content libraries in entertainment.
Regulators at the Department of Justice reviewed the merger for potential antitrust violations but allowed the review period to expire without filing suit. The decision followed a lobbying campaign from theater owners and smaller production companies, who argued that a combined Paramount-Warner Bros. would reduce the number of buyers for independently produced films and television shows.
The deal is the largest media merger since Disney's $71 billion purchase of 21st Century Fox assets in 2019. It follows a wave of consolidation that includes Amazon's $8.5 billion acquisition of MGM in 2022 and Discovery's $43 billion combination with WarnerMedia in the same year.
Paramount shares rose 4% in early trading following the announcement. Warner Bros. Discovery shares gained 6%. Both companies said the transaction is expected to be finalized within 30 days.
Ellison said in a statement that the combined company will invest $5 billion annually in original content, a figure that exceeds either studio's current spending. He did not specify how the company would fund that commitment alongside debt payments.
The merger is expected to face scrutiny from entertainment unions. The Writers Guild of America, which struck for 148 days in 2023 over streaming residuals and AI protections, has not commented on the deal. The union's contract expires in May 2026.
