The media deal has been described as the biggest all-cash deal in corporate history
Latham & Watkins; Cravath, Swaine & Moore LLP; Wachtell, Lipton, Rosen & Katz; and Debevoise & Plimpton LLP have confirmed their involvement in the landmark acquisition of Warner Bros Discovery by Paramount Skydance.
Latham and Cravath advised Paramount, while Wachtell and Debevoise guided WBD on the landmark media deal that was described as the biggest all-cash deal in corporate history by Wachtell. Under the definitive merger agreement, Paramount will pick up the entirety of WBD – including its streaming and studios division as well as its global linear networks division – for US$31 per share in cash plus a “ticking fee” of US$0.25 per share if the deal does not close by September 30; this fee will be paid out for each quarter until the transaction’s completion.
The deal assigns WBD an equity value of US$81 billion and an enterprise value of US$110 billion. The purchase is being financed by US$47 billion in cash equity fully backed by the Ellison Family and RedBird Capital Partners; per a Paramount press release, the equity may include other strategic and financial partners at completion. Bank of America, Citigroup, and Apollo also provided US$54 million in debt commitments, including US$15 billion to backstop WBD's current bridge facility and US$$39 billion of incremental new debt; however, it excludes US$3.5 billion in bridge financing to backstop Paramount’s current US$3.5 billion revolving credit facility.
A special committee of Paramount’s board decided the equity investment’s terms; this committee consisted of independent directors with independent legal and financial advisors. The proposed acquisition is not pending any financing conditions; Paramount terminated its all-cash tender offer to purchase all outstanding WBD shares.
With the agreement, Paramount has snatched WBD from Netflix; last December, Netflix and WBD had inked a US$82.7 billion deal for Netflix to acquire WBD along with its film and television studios, HBO, and the streaming service HBO Max. Paramount challenged the agreement following its announcement on the grounds that Paramount had made a better offer to WBD.
Wachtell confirmed that WBD pulled out of the Netflix deal after WBD’s board concluded that Paramount’s topping bid was superior to its agreement with Netflix. Cravath indicated that both companies’ boards had unanimously approved the merger.
Wachtell’s team on this deal consisted of corporate partners Andrew J. Nussbaum, Karessa L. Cain, and Hannah Clark as well as associates Steven A. Jaffe and Jacob D. Pearlman; tax partner Deborah L. Paul; litigation partners William Savitt and Ryan McLeod as well as associate Brittany A. Fish; finance partner Gregory E. Pessin; and trusts and estates counsel Pamela Ehrenkranz and associate Nicholas G. Stringfellow.
Leading the Debevoise team on this transaction were M&A partners Jonathan Levitsky, Erik Andrén, Gordon Moodie and Katherine Durnan Taylor; employee benefits and executive compensation partner Simone Hicks; IP and technology transactions partner Henry Lebowitz; capital markets partners Benjamin Pedersen and Matthew Kaplan; finance partners Ryan Rafferty and Ramya Tiller; and tax partners Peter Schuur and Erin Cleary. They worked together with M&A partners John Love and William Regner, of counsel Jeffrey Rosen, counsel Sarah Jacobson and Molly Stockley, associates Amanda Blazek, Robert Geren, Grace Huang, Richard Hughes, Rekha Korlipara, Victoria Li and Tomohiro Numahata and law clerks Jason Bach, Tyler Lorenzen and Nicholas Paruta, finance counsel Jonathon Yeung and associates Talia Lorch and Marta Poplawski; capital markets associates Emily Espinel, Jasmine Fong, Alice Gu, Ramsha Khursheed and Maayan Stein; tax counsel Ben Lee Friedman, associates Olivia Coral Daniels, Harshil Mehta and Isabel Shipman; employee benefits and executive compensation of counsel Lawrence Cagney, counsel Sam Whitaker and Wendy Widman and associates Gregory Kramer, Alexandra Schoellkopf and Samuel Siegel; IP and technology transactions associates Yinran Pan and Natalie Mauch and law clerk Alice Zheng; and litigation partners Susan Reagan Gittes and Mark Goodman and associate Amy Zimmerman.
WBD's financial advisors were Allen & Company, J.P. Morgan, and Evercore.
Latham’s M&A team on the deal was headed up by New York partner Ian Nussbaum, Chicago partner Max Schleusener, and Los Angeles partners Rick Offsay and Liliana Ranger, who worked with associates Daniel Weissman, Maddy Berg, Sam Lehman, Emma Giusto, and Jamie Reinah. New York partners Benjamin Cohen and Kaj Nielsen tackled capital markets matters; New York partner Joshua Tinkelman and Washington, D.C. partner Jason Licht handled finance matters; Los Angeles partner Pardis Zomorodi advised on tax matters; Los Angeles partner Julie Crisp took on benefits matters; Chicago partner Nineveh Alkhas handled labor matters; Orange County partner Ghaith Mahmood tackled intellectual property and data and technology transactions matters; New York partner Dara Denberg handled real estate matters; US antitrust matters were handled by Bay Area partner Joshua Holian, New York partner Katherine Rocco, and Washington, D.C. partners Andrew Forman, Bill Rinner, Caitlin Fitzpatrick, and Peter Todaro as well as associates Doug Tifft and Charlotte Yeung; non-US antitrust matters were tackled by Brussels partners Héctor Armengod, Carles Esteva Mosso, and Anthemis Economou as well as London partner Jonathan Parker; Hamburg partner Jana Dammann de Chapto advised on FDI matters; Washington, D.C. partners Matthew Brill and Elizabeth Park advised on FCC matters; Washington, D.C. partners Paul Rosen and James Barker and counsel Ruchi Gill advised on regulatory matters; Chicago partner Chris Drewry and New York counsel Adam Tamzoke handled activism matters; and New York partners Blair Connelly and Zachary Rowen tackled litigation matters.
Latham also advised the investor consortium, including the Ellison Family.
Cravath’s team was spearheaded by partners Faiza J. Saeed, Daniel J. Cerqueira, Claudia J. Ricciardi, Alexander E. Greenberg and Minh Van Ngo and included associates Temiloluwa A. Dele-Dare, Colin L. Halvey and Joseph N. Kadoch, who handled M&A matters; partners Andrew J. Pitts and C. Daniel Haaren and associates Alan J. Steiner, Sam Baucom and Sasha G. Savitsky who tackled capital markets matters; partner George E. Zobitz who advised on banking matters; partner Lauren Angelilli and associates Carlos Nicholas Obando and Carolyn Liziewski who worked on tax matters; partner Jonathan J. Katz, senior attorney Aaron S. Cha and associate Caroline Wyatt who handled executive compensation and benefits matters; partners Andrew C. Finch and Noah Joshua Phillips, of counsel John F. Kendrick and associate Jacob Freund who handled antitrust matters; partners Kevin J. Orsini and Justin C. Clarke and associates Kelsey A. Miller, Abraham Cooper and Tasneem Warwani who worked on litigation matters; partner John W. White who advised on corporate governance matters; of counsel Kathryn-Ann Stamm and associate Pierre Schlaefli who handled intellectual property matters; and of counsel Joyce Law and practice area attorney Lauren Piechocki who worked on real estate matters. Aaliyah Channer also tackled M&A matters, Han Wen Zhang capital markets matters, Scarlett A. Neely executive compensation and benefits matters, and Avery P. Bernstein litigation matters.
Paramount's lead financial advisors were Centerview Partners LLC and RedBird Advisors; other financial advisors were Bank of America Securities, Citi, M. Klein & Company, and LionTree Advisors.
The Paramount board's special committee was advised by a team from Cleary, Gottlieb, Steen & Hamilton LLP that included partners Paul Shim, Kelsey Nussenfeld, and Claire Schupmann, and associate Nicholas Serensits, with partner Mark McDonald handling litigation matters. Meanwhile, partner Daniel Culley and senior counsel David Gelfand tackled antitrust matters. Barclays Capital were the financial advisors.
A team from Cahill Gordon acted for the lead arrangers and debt financing sources linked to Paramount's financing commitments for the acquisition. Partners Jim Clark, Joe Slotnick, Ted Lacey, and Tristan Manley led the team alongside associates Richard Pan, Jenni Barra, Luke Twardowski, Olivia Baruch, and Kevin Teng.
