WB and Paramount Pictures Exploring Merger Options

Shares of Warner Brothers Discovery fell more than 5% on Dec 20 after reports that the media and entertainment giant was exploring a merger with Paramount Global.  Warner Brothers Discovery CEO David Zaslav met with Paramount global president Bob Bakish for several hours to discuss the companies' merger, according to Axios. The news held in New York on Dec 19 was considered preliminary and uncertain.

Zaslav also spoke with Shari Redstone, owner of Paramount and the parent company, about a possible deal, Axios reported. The Warner Brothers Discovery brand includes CNN, HBO and the film studio of the same name, Paramount Properties and the film studio of the same name and  CBS Broadcast Group.

Zaslav and Bakish discussed ways the companies could build on one another's strengths, such as by combining their streaming services to better compete with Netflix and Disney+, the report said.

Warner Brothers Discovery had a market value of about $28.4 billion based on its closing share price Dec 21-- more than double the roughly $10.3 billion valuation of Paramount Global based on its closing share price. Warner has hired bankers to explore an acquisition, Axios reported.

A merger of that size could spark further consolidation in the media industry and draw intense scrutiny by US regulators.