Warner Bros. Discovery, Inc. 8-K

What Happened

• On February 27, 2026 Warner Bros. Discovery, Inc. (WBD) entered into a definitive Agreement and Plan of Merger with Paramount Skydance Corporation (PSKY) and PSKY’s merger subsidiary. Under the deal, Merger Sub will merge into WBD and WBD will become a wholly owned subsidiary of PSKY. The WBD and PSKY boards unanimously approved the Merger Agreement, and WBD’s board resolved to recommend stockholder approval.
• Purchase price: $31.00 cash per share of WBD common stock at closing, plus a “Ticking Consideration” (an additional $0.00277778 per day for days after Sept 30, 2026 to the closing, subject to limits). PSKY and backers have committed funding (PIPE and debt commitments) to support the transaction; PSKY’s financing is not a closing condition.

Key Details

• Closing conditions include WBD stockholder approval (majority vote), required regulatory approvals/clearances, and absence of injunctions. PSKY’s obligation is conditioned on no material adverse effect to WBD’s Streaming & Studios segments and on WBD not having completed a planned separation of Streaming & Studios from Global Linear Networks.
• Equity awards: vested options/RSUs converted to cash based on the Merger Consideration; many unvested awards will be assumed and converted into contingent cash rights. Underwater options (exercise ≥ Merger Consideration) are cancelled with no payment. Deferred and notional units are converted as described in the agreement (including an Equity Award Exchange Ratio tied to PSKY VWAP).
• Financing and backstops: The Ellison Trust (Lawrence J. Ellison) agreed to subscribe up to $46.72 billion of PSKY Class B stock (plus related amounts) and RedBird committed $250 million; Ellison also executed a guarantee covering large portions of the Merger Consideration, certain termination fees and other obligations.
• Contractual termination fees: WBD may owe PSKY a $3.0 billion “Company Termination Fee” in specified deal termination scenarios; PSKY would owe WBD a $7.0 billion “Regulatory Termination Fee” if the deal fails due to antitrust/foreign regulatory injunctions or related regulatory timing issues. PSKY paid Netflix a $2.8 billion termination fee after WBD terminated a prior merger agreement with Netflix.

Why It Matters

• This is a transformative acquisition proposal: it would take WBD private as a PSKY subsidiary and ends WBD’s previously announced plan to separate into two public companies. The $31 per-share cash price and the significant guarantee and PIPE commitments show PSKY and its backers are providing substantial funding and assurance to support closing.
• Key investor considerations from the filing: stockholder and regulatory approvals are required (and regulatory risk is significant, reflected in the $7B regulatory break fee), the timetable extends into 2027 (March 4, 2027 with a possible extension to June 4, 2027), and vested/unvested equity holders will receive cash treatment or contingent cash rights per the agreement. WBD will file a proxy statement with more detail for stockholders to review before a vote.