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Paramount Skydance has settled a lawsuit with California and 11 other US states challenging its planned $110bn acquisition of Warner Bros. Discovery (WBD). The states had argued that the deal could reduce competition and increase the combined company’s influence over content and pricing. Under the settlement, Paramount has agreed to invest an additional $1.5bn in US film production over five years and maintain a minimum film output of 30 releases annually during the first two years, rising to 32 in each of the following three years. At least four releases annually must be independently produced. Failure to meet these targets could result in penalties of $30mn per missed film and potentially require the sale of Miramax Studios. The agreement also requires Paramount and WBD to negotiate distribution agreements for their basic cable channels separately for five years. California’s attorney general said the settlement addressed concerns over competition and consumer choice, while stressing that it did not constitute an endorsement of the merger. The Writers Guild of America has also settled its separate lawsuit. The merger has already received regulatory clearance in the EU and UK.
Paramount’s bonds traded stable with its 5.9% 2040s at 73.1, yielding 9.4%. WBD’s 5.05% 2042s traded at 61.6, yielding 9.9%.
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