Warner Bros Discovery has agreed to be acquired by Paramount Skydance in a $110 billion deal signed Friday morning (Feb. 27 as per US time), according to an audio clip of a global townhall by the company, which was reviewed by Reuters.

“Netflix had the legal right to match the PSKY offer. As you all know, they ultimately decided not to do that. That then resulted in a signed agreement with PSKY as of this morning. So that’s where everything stands,” Bruce Campbell, Warner Bros’ chief revenue and strategy officer, said in the townhall, a Reuters report stated yesterday.

Paramount and Warner Bros did not immediately respond to requests for comment.

The agreement caps a bidding war after Netflix declined to match Paramount‘s latest $31-per-share offer, which was deemed superior by Warner Bros to the streaming pioneer’s $27.75-per-share agreement for its studio and streaming assets.

Paramount is expected to easily win European Union antitrust approval, with any required divestments likely to be minor, Reuters had reported yesterday, citing sources.

However, the merger has drawn scrutiny from California State Attorney General Rob Bonta, who said that the state is investigating the Paramount deal and will be “vigorous” in its review.The deal, which includes some $29 billion in debt, is among Hollywood’s biggest media shake-ups and will create one of the largest film studios in the world, allowing Paramount to tap Warner’s trove of intellectual property, including franchises such as ‘Fantastic Beasts’ and ‘The Matrix’.

The company, led by billionaire Larry Ellison’s son David Ellison, enticed Warner’s board back to the bargaining table by raising the possibility of an improved cash offer.

In its revised bid, Paramount raised the termination fee it would pay should the deal fail to gain regulatory approval to $7 billion from $5.8 billion. Paramount paid the $2.8 billion termination fee that Warner Bros owed Netflix, the streaming giant said in a regulatory filing yesterday.

Meanwhile, British cinemas cautiously welcomed Paramount Skydance beating Netflix in the race to buy Warner Bros Discovery, but remained concerned that combining the Hollywood studios could cost jobs and reduce the number of movies released in theatres, a Reuters report yesterday from London added.

Phil Clapp, chief executive of the UK Cinema Association, said Netflix’s withdrawal simplified matters but did not ease concerns around the loss of a major U.S. studio and the implications for the theatrical slate.

“We take the public statements from Paramount Skydance about its plans for any merged company in good faith – as we did those from Netflix,” he said.
“But we saw with the Disney acquisition of Fox in 2019 similar public undertakings and now find ourselves in a position where the combined company releases around 40 percent fewer films than was the case when they were separate.”