Warner Shares Near $31 as States Settle Paramount Merger Suit

Warner Bros. Discovery shares rose nearly 11% to $30.80 on September 21 after 12 states and the Writers Guild of America settled lawsuits seeking to block Paramount Skydance’s takeover. Paramount shares moved the other way, falling nearly 3% to $9.91 by the close, according to Fast Company’s market report.

The settlement removes the last major legal challenge, but the deal is not yet complete. A judge must approve the states’ agreement. Paramount has offered $31 in cash per WBD share, and the transaction’s enterprise value, including debt, is about $110 billion.

The two stocks reflect different investor stakes. WBD’s closing price sat just 20 cents below the cash offer, leaving little room for a gain if the deal closes as planned. Paramount investors, meanwhile, face the costs and risks of combining the companies.

The agreement requires Paramount to spend an additional $1.5 billion on U.S. film production over five years. It also sets annual film-release targets and creates a $47.5 million fund for workers displaced by the merger. A new board is to monitor editorial independence at CBS and CNN.

Those commitments come as Paramount has said it expects to find $6 billion in savings through cuts to overlapping operations. The company will also have to negotiate separately over the two firms’ basic cable channels for five years, limiting some options for combining those businesses.

Timing matters financially: Warner shareholders are due an extra 25 cents per share for each quarter the deal remains unclosed after September 30, calculated daily. That provision gives Paramount a reason to move quickly, though court approval remains a condition to closing.

The settlement eases a key uncertainty, not the business challenge ahead. Investors will be watching for the judge’s decision and how Paramount plans to combine studios, streaming services and cable networks while delivering promised savings.