FCC Approves Foreign Investment in Paramount's Warner Acquisition

RegulationM&A · Partnership

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The U.S. Federal Communications Commission on the 17th approved foreign investment in U.S. media giant Paramount Skydance's $110 billion acquisition of rival Warner Bros. Discovery. The FCC regulates foreign investment in U.S. television broadcasting, and said it would waive the 25% cap on foreign equity ownership in this case, allowing individual investors to hold up to 20% of the shares. However, foreign investors may not hold voting shares, and may not exert any influence, direction, or control over Paramount's content decisions or corporate management, nor provide comments or guidance, nor be granted access to non-public data concerning U.S. citizens. Paramount welcomed the approval, stating that the merger will give it the scale and resources needed to compete, invest, innovate, and deliver premium content to audiences around the world. According to Paramount, at the close of the transaction, the family led by billionaire and Oracle co-founder Larry Ellison and RedBird Capital Partners will jointly hold the largest equity stake and 100% of the voting shares in the combined company, while other shareholders will have no management rights whatsoever. According to the FCC, after the transaction closes, Middle Eastern investors will hold approximately 85% of Paramount's shares, of which 15.1% is expected to be held by Saudi Arabia's sovereign wealth fund, the Public Investment Fund.