Tencent is considering investing several hundred million dollars as a passive financial partner in Paramount's $110 billion acquisition of Warner Bros. This follows a previously withdrawn $1 billion commitment from Tencent due to Warner Bros.' concerns about potential U.S. national security regulatory challenges.
The deal's completion could take time and Tencent may still opt out. The broader context includes ongoing U.S. scrutiny of Chinese ownership of American assets, as seen with TikTok and a current probe into Tencent's data practices.
The acquisition is primarily funded by $47 billion in equity from the Ellison family and RedBird Capital, plus $54 billion in debt. Tencent already has existing ties to Paramount through a minority stake and a history of co-financing films with Skydance.
Main topics: Tencent's potential investment, the Paramount-Warner Bros. deal structure and value, U.S. national security concerns regarding Chinese investment, and the existing financial relationships between the involved companies.
Tencent intends to invest several hundred million dollars in Paramount's acquisition of Warner Bros, according to people familiar with the situation.
The Chinese company would be acting as a passive financial investor, the people said, asking not to be identified because the matter is private.
Paramountâs offer for Warner Bros. in December included a $1 billion equity commitment from Tencent, according to a filing at the time, but that was withdrawn after Warner Bros. raised concerns that the Chinese companyâs presence could lead to national security challenges with US regulators. After Paramount raised and amended its offer, Warner Bros. agreed to sell to the David Ellison-led company in a deal worth $110 billion.
Tencent might still decide not to invest, the people said, adding that it could take a while for the deal to be completed.
Representatives for Tencent and Paramount declined to comment.
Chinese ownership of US assets has been a cause for concern in Washington, resulting in a deal for social media site TikTokâs US operation this year. Supercell Oy, a Finnish video-game company owned by Tencent, said this month it is cooperating with a US security probe of its Chinese parentâs data practices.
Tencent already holds a minority nonvoting stake in Paramount. It also has co-financed films produced by Skydance such as Terminator: Dark Fate, and helped with marketing and distribution of the studioâs blockbusters since its strategic investment in the then Skydance Media in 2018.
Paramountâs acquisition of Warner Bros. is funded by $47 billion in equity backed by the Ellison family and RedBird Capital Partners. Other strategic financial partners may join at closing of the transaction, which is also backed by $54 billion of debt commitments from Bank of America Corp., Citigroup Inc. and Apollo Global Management Inc. Existing Paramount shareholders may be able to participate in a rights offering of up to $3.25 billion Class B stock alongside the new equity investment.
The Chinese company would be acting as a passive financial investor, the people said, asking not to be identified because the matter is private.
Paramountâs offer for Warner Bros. in December included a $1 billion equity commitment from Tencent, according to a filing at the time, but that was withdrawn after Warner Bros. raised concerns that the Chinese companyâs presence could lead to national security challenges with US regulators. After Paramount raised and amended its offer, Warner Bros. agreed to sell to the David Ellison-led company in a deal worth $110 billion.
Tencent might still decide not to invest, the people said, adding that it could take a while for the deal to be completed.
Representatives for Tencent and Paramount declined to comment.
Chinese ownership of US assets has been a cause for concern in Washington, resulting in a deal for social media site TikTokâs US operation this year. Supercell Oy, a Finnish video-game company owned by Tencent, said this month it is cooperating with a US security probe of its Chinese parentâs data practices.
Tencent already holds a minority nonvoting stake in Paramount. It also has co-financed films produced by Skydance such as Terminator: Dark Fate, and helped with marketing and distribution of the studioâs blockbusters since its strategic investment in the then Skydance Media in 2018.
Paramountâs acquisition of Warner Bros. is funded by $47 billion in equity backed by the Ellison family and RedBird Capital Partners. Other strategic financial partners may join at closing of the transaction, which is also backed by $54 billion of debt commitments from Bank of America Corp., Citigroup Inc. and Apollo Global Management Inc. Existing Paramount shareholders may be able to participate in a rights offering of up to $3.25 billion Class B stock alongside the new equity investment.
Meridiano
