Warner Bros shareholders approve $110 billion merger with Paramount

Warner Bros. Discover (WBD) ‌shareholders have voted in agreement with the $110 billion merger with ⁠Paramount Skydance. WBD shareholders met virtually on Thursday to vote on the deal.

The outcome of the preliminary results would see the joint force of Hollywood’s two legacy studios.

However, the shareholders rejected WBD CEO David Zaslav‘s lucrative compensation package, signifying a major development in the deal.

While the results are preliminary, WBD is expected to release a comprehensive update of the shareholders’ agreement. According to reports, the company’s secretary noted that the results revealed that shareholders “overwhelmingly” voted to approve the merger.

With the shareholders’ approval secured, Paramount, led by CEO David Ellison, now needs to complete the deal by clearing the regulatory hurdles.

The merger, which would see the powerhouses come under one roof, has been tipped to reshape the Hollywood industry.

The deal would combine the HBO Max and Paramount+ streaming services, creating the largest collection of TV channels in the country. The collection would encompass CBS, TNT, TBS, CNN, HGTV, MTV, Comedy Central, Nickelodeon, and many others.

Also Read: Paramount wins $111 billion Warner Bros acquisition battle as Netflix walks away.

Paramount won the battle for Warner Bros

The latest victory for Paramount is coming after months of bidding for WBD.

In December, Paramount bid for WBD after Netflix announced its $82.7 billion deal to buy Warner’s streaming and studio assets.

WBD’s board rejected Paramount’s initial offers multiple times, publicly endorsing the Netflix deal instead. Paramount’s first bid was $108.4 billion for the entire company, more than Netflix was offering, but WBD did not relent and kept raising the offer.

In late February, the company submitted a revised offer at $31 per share, bringing the total to $111 billion. On February 26, WBD’s board determined Paramount’s offer was “superior” and gave Netflix four business days to match it.

However, Netflix said it would not raise its offer for Warner Bros. The streaming giant said that while its deal would have created shareholder value, matching Paramount’s price made the deal “no longer financially attractive.”

Netflix co-CEOs Ted Sarandos and Greg Peters said the company had “always been disciplined” and wouldn’t overpay to win. At the price needed to match Paramount, the math didn’t work.

Aside from the high price, Paramount also won the deal with protections that made it hard for WBD to reject its bid. The company agreed to pay a $7 billion reverse termination fee if regulators block the deal, plus the $2.8 billion breakup fee WBD owes Netflix for cancelling their agreement.