Middle East wealth funds are set to own 38.5% of Paramount’s non-voting equity after its $110 billion Warner Bros. Discovery acquisition closes.
LOS ANGELES: Middle East wealth funds are set to become major shareholders in Paramount after US regulators approved the foreign-investment structure supporting the media group’s proposed $110 billion acquisition of Warner Bros. Discovery.
The US Federal Communications Commission approved Paramount’s request on September 17, allowing foreign investors to hold significant indirect equity interests in the combined entertainment company. The approval comes with restrictions designed to separate foreign investment from voting control and management.
Three sovereign investors from Saudi Arabia, the UAE and Qatar are expected to collectively own 38.5% of Paramount’s non-voting equity once the transaction closes.
Saudi Arabia’s Public Investment Fund is expected to hold 15.1%, Abu Dhabi’s L’Imad Holding Company 12.8%, and the Qatar Investment Authority 10.6%. Together, the stakes represent a significant Gulf investment in one of the world’s largest proposed media combinations.
Who will control the combined company?
The distinction between economic ownership and corporate control is important.
Paramount has said the Ellison family and RedBird Capital Partners will retain 100% of the voting shares. The foreign investors will not receive board seats or governance rights and will be restricted from influencing programming, editorial decisions and company management.
Foreign investors overall are expected to hold 49.5% of Paramount’s non-voting equity. The FCC ruling also followed a national-security review that resulted in commitments covering areas including protection of US customer data and restrictions on foreign investors’ access and rights.
The Middle East wealth funds therefore gain substantial financial exposure to the combined business without equivalent voting control.
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Why is the Warner Bros deal so significant?
Paramount announced its definitive agreement to acquire Warner Bros. Discovery in February. The transaction values Warner Bros. Discovery at $81 billion in equity value and $110 billion in enterprise value. Paramount has said it expects more than $6 billion in synergies from the combination.
The deal would bring major entertainment assets under one corporate group, combining Paramount Pictures, Paramount+ and CBS operations with Warner Bros., HBO, CNN and an extensive film and television library.
The FCC decision clears an important regulatory issue surrounding the financing structure, although the transaction still faces a legal challenge from a coalition of US states, with a trial scheduled for March 2027.
For Middle East wealth funds, the investment represents another major move into global entertainment and media assets, adding to the region’s expanding international investment portfolio.
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Impact to expect
Influence. The investments could deepen commercial links between Gulf capital and the global entertainment industry, although formal voting and management control will remain with Paramount’s US shareholders.
