Paramount Skydance is set to win the bid to acquire Warner Bros Discovery after the streaming platform Netflix walked away.
The deal, thought to be valued at around $111bn (£82.2bn), will potentially see the historic Hollywood studios become part of a US corporation known for producing shows such as Emily in Paris and Mission: Impossible.
While Warner Bros Discovery has yet to formally accept the offer, it's expected that the Ellison family behind Paramount Skydance will likely acquire the whole company, including the CNN news network.
“We are excited about the potential of a combined Paramount Skydance and Warner Bros Discovery and can’t wait to get started working together telling the stories that move the world,” said David Zaslav, the president and CEO of Warner Bros Discovery.
The news comes shortly after Netflix backed away from the proposal, with a spokesperson for the streaming giant saying the deal was "no longer financially attractive".
“We believe we would have been strong stewards of Warner Bros’ iconic brands, and that our deal would have strengthened the entertainment industry and preserved and created more production jobs in the US,” said Netflix’s co-chief executives.
“But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
Unlike Netflix, Paramount had expressed plans to buy all of Warner Bros’ operations, including CNN and Discovery, as well as HBO Max, DC Studios and popular titles such as Harry Potter.
It would see them added to Paramount’s CBS and combine two of Hollywood’s last five remaining studios.
A Paramount buyout of Warner’s business would significantly reshape Hollywood and the wider media landscape.
Warner Bros films such as Superman, Barbie, and One Battle After Another, as well as hit TV series such as The White Lotus and Succession, would join Paramount’s extensive library, including the Mission: Impossible and Star Trek franchises.
But there have been worries raised by legislators and industry trade groups that yet more consolidation in the sector would concentrate power further in the hands of a small number of players.
This could lead to more job cuts, less diversity and possibly push up streaming prices for consumers, they fear.
Paramount, whose approach was initially hostile, has argued the merger would be good for the industry and consumers, though it will need to pass stringent competition tests by regulators in the US and Europe.
Netflix had originally agreed to buy Warner Bros’s studio and streaming business last December in a deal worth roughly 82 billion dollars (£61 billion) including debt.
Co-chief executives Ted Sarandos and Greg Peters said after Paramount’s latest bid: “The transaction we negotiated would have created shareholder value with a clear path to regulatory approval.
“However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid.”
