Paramount's hard-fought takeover of Warner Bros. Discovery closed Tuesday. Here's how we got here

Paramount Skydance Corp finalized a $110 billion acquisition of Warner Bros Discovery Inc on Tuesday, forming a global entertainment powerhouse under the new brand Skydance. The combined firm shifted its primary stock listing to the New York Stock Exchange, trading under the symbol SKYD, with shares experiencing a slight 2% decline during early trading.

Warner Bros Discovery shareholders were rewarded with $31.0167 per share in cash, complemented by an additional $41.9 million fee to account for the time gap between late September and the closing date. This merger merges a comprehensive array of media properties, combining prominent film studios, leading streaming platforms, broadcast networks, and renowned news divisions such as CBS News and CNN.

The strategic objective revolves around amalgamating size with technological advancements to navigate industry transformations, such as the rapid shift to streaming and escalating production costs. Executives unveiled ambitious plans to release a minimum of 30 theatrical films per year with a 45-day window, alongside more than 180 television series.

Financially, the unified entity generates approximately $70 billion in annual revenue and aspires to achieve at least $6 billion in run-rate synergies within the next three years. The focus of execution will be on optimizing technology, marketing, and corporate operations, with projections indicating that annual free cash flow should exceed $10 billion by 2030.

Despite this commercial scale, the company carries a substantial debt load of around $80 billion, primarily due to the transaction. CEO David Ellison faces immediate challenges in integrating direct-to-consumer platforms, extracting pledged synergies, and reducing net leverage to 3.0x by 2029. To reinforce the balance sheet, the deal was backed by $47 billion in new equity investment, priced at $12.00 per share, supported by the Ellison Family, RedBird Capital, and various sovereign funds.

Control of the voting shares remains solely within the Ellison Family and RedBird, collectively owning 100% of the combined company's Class A voting shares. Regulatory approvals were obtained across nearly 70 global jurisdictions, and recent settlements with state attorneys general and creative labor unions were secured. With these hurdles cleared, the focus now shifts to Ellison's vision to unify Paramount+ and HBO Max into a single, cohesive streaming platform.