US communications regulator approves foreign investment in Paramount-Warner merger
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Paramount said the merger will have the scale and resources necessary to deliver premium content to audiences worldwide.
PHOTO: REUTERS
- The US Federal Communications Commission approved foreign investment in Paramount's US$110 billion acquisition of Warner Bros Discovery, allowing up to 20% equity but no voting rights for foreign investors.
- The FCC and Team Telecom ensured foreign investors have no control over content decisions, management, or access to US citizens' personal data, addressing national security concerns.
- Paramount stated the deal will strengthen its global competitiveness, with the Ellison family and RedBird Capital Partners holding all voting shares, despite legal challenges delaying the merger.
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WASHINGTON - The United States Federal Communications Commission (FCC) approved a Paramount Skydance request to allow foreign investors to back its US$110 billion (S$140 billion) acquisition of Warner Bros Discovery, but said they could not hold voting stock.
A group of Democratic senators had raised concerns about Middle Eastern sovereign wealth funds taking stakes.
In a decision released by the FCC’s media bureau on Sept 17, the commission said it was waiving the 25 per cent cap on foreign equity ownership and said individual investors could own up to 20 per cent of the equity.
It also said foreign investors can have no voting stock and “will not have any influence, direction, or control over or provide any commentary or guidance on Paramount’s content decisions, company management”, or access to non-public data on US citizens.
Paramount praised the approval and said it followed a review by a US government committee of national security officials known as “Team Telecom” after ensuring that foreign investors will not have access to personal data of US citizens.
“A combined Paramount-WBD will have the scale and resources necessary to compete, invest, innovate, and deliver premium content to audiences worldwide,” the company said.
A US judge has temporarily blocked the takeover pending a trial in March on a legal challenge filed by a dozen US states. The US Justice Department and FCC previously approved the merger.
Paramount said when the deal closes, the family headed by billionaire and Oracle co-founder Larry Ellison and RedBird Capital Partners will collectively hold the largest equity stake in the combined company and 100 per cent of the voting shares, with no other equity participant having any governance rights.
The FCC said Middle Eastern investors would own about 85 per cent of the equity in Paramount after the deal closed, including 15.1 per cent for the Saudi Arabia Public Investment Fund.
Paramount said sovereign wealth funds would own 38.5 per cent after the deal closed.
Democratic FCC Commissioner Anna Gomez said on Sept 17, “The FCC just let some of the most repressive governments in the world indirectly control nearly all of a combined Paramount-Warner Bros. An investment this large in one of America’s biggest media companies doesn’t just buy equity, it secures influence over what gets said and what gets made.” REUTERS