Paramount edges up as $111bn Warner Bros. deal nears the finish

Paramount shares climbed 2% to $10.11 on Tuesday, 22 September, after a legal settlement cleared the way for its $111 billion purchase of Warner Bros. Discovery.

The lift was modest. Wall Street is watching, not cheering.

The settlement was reached with California and other states, removing a major antitrust hurdle to a deal that would join two of Hollywood's largest studio and television owners, Reuters reported. Under a five-year consent decree, meaning a court-enforced promise, the Paramount and Warner Bros. Discovery cable networks would negotiate separately with pay-TV operators, the companies that sell cable packages to homes, Deadline reported. The Writers Guild of America also settled its lawsuit challenging the merger on Monday, 21 September.

Closing is close, but not done. The merger is expected to take another two weeks to complete. Paramount has promised a ticking fee, meaning a daily late payment, of about $7 million per day to Warner Bros. Discovery shareholders if the deal is still pending as of 1 October.

Warner Bros. Discovery shares were essentially flat on Tuesday. That followed a sharp jump on Monday, when the shares gained about 10% to trade at about $30.50 on news of the settlement agreement. The underlying offer is $30 per share in cash for all of Warner Bros. Discovery. Paramount Skydance has said it satisfied all closing conditions and received clearances from regulators representing 69 jurisdictions.

Investors remain cautious about the price and the debt behind it. Paramount shares were still down almost 25% for 2026 to date at Tuesday's close. UBS warned about the debt load and the reliance of the combined group on linear TV, meaning traditional broadcast and cable channels.

Guggenheim analyst Michael Morris called the combination a 'show me' story in a client note. Morgan Stanley analyst Sean Diffley said the $6 billion savings target is about 11% of operating expenses, with the majority from non-labour sources. Paramount has set that $6 billion target to help pay down debt after the takeover.

For viewers, this means a waiting game. A combined Paramount and Warner Bros. Discovery would control a large slate of studios, streaming services and cable channels, plus the crews of around two hundred people who staff each large production and the writers' rooms behind them. Where the $6 billion in savings would fall has not been detailed.