Paramount has secured signed equity commitments from three Middle Eastern sovereign wealth funds for close to $24 billion to help finance its $110 billion deal to acquire Warner Bros. Discovery, according to the Wall Street Journal.
Saudi Arabia’s Public Investment Fund has agreed to provide roughly $10 billion of the total, per the outlet. Other Middle East investors include the Qatar Investment Authority and Abu Dhabi’s L’imad Holding Co.
Representatives for Paramount declined to comment. PIF, QIA and L’imad Holding Co. did not immediately return TheWrap’s request for comment.
The $24 billion commitment was first revealed back in December, when Paramount was competing in a bidding war for Warner Bros. Discovery with Netflix, who previously reached an $83 billion deal for WBD’s studio and streaming assets but later dropped out.
However, Paramount had not previously confirmed whether the Middle East funds were included in the final $110 billion deal, which is expected to close in the third quarter. While they’ve noted that other strategic or financial partners could contribute equity financing at closing, Paramount has said that the Ellison family and RedBird Capital Partners are prepared to fully back the $47 billion in equity financing. The deal also includes $54 billion of debt commitments from Bank of America, Citigroup and Apollo.
The Journal notes that the Gulf investors are not expected to trigger a review by the FCC nor the Committee on Foreign Investment in the United States (CFIUS), which would be required if a foreign entity obtains a 25% or more voting interest in a U.S. company and a foreign government holds a 49% or greater voting interest in that foreign investor. Paramount has previously said the Middle East funds would not have board seats nor governance rights.
In addition to the Middle East Funds, Jared Kushner’s Affinity Partners previously agreed to contribute financing for Paramount’s Warner Bros. bid, but later backed out. China’s Tencent Holdings, which is a passive investor in Skydance, also previously committed $1 billion but later backed out. While Bloomberg reported last month that Tencent was considering investing several hundred million dollars in the combined entity, the Journal reports that Tencent is not involved in the deal.
Shareholders will vote on the Paramount-Warner Bros. deal during a special meeting on April 23. The deal is also subject to regulatory approval.
According to the Journal, Paramount executives have told employees to prepare for the deal to close as soon as July. If it doesn’t close by Sept. 30, shareholders will get a 25 cent per share “ticking fee” — or approximately $650 million — each quarter until closing. If it doesn’t close at all due to regulatory matters, WBD will get a $7 billion termination fee.
Shares of Paramount popped 3.6% in trading on Monday following the news.
