Paramount Skydance says the Chinese gaming and social media giant Tencent Holdings withdrew from its bid to buy Warner Bros Discovery to avert a possible national security review. Paramount’s revised filing with the U.S. Securities and Exchange Commission of its takeover bid said the Chinese company had dropped its $1 billion financing commitment out of concern, since it would be a “non-U.S. equity financing source,” that its bid might be subject to a review by the Committee on Foreign Investment in the United States, known as CFIUS. That was even though approval by CFIUS or by the Federal Communications Commission was not a condition of the bid.
The SEC filing, dated Monday, said that foreign sovereign wealth funds of Saudi Arabia, Abu Dhabi and Qatar, which are providing $24 billion for Paramount’s bid, had agreed to give up a right to participate in Warner Bros’ management to avoid the additional scrutiny. On Monday, Paramount launched a hostile $77.9 billion takeover offer for Warner Bros. Discovery, competing with rival bidder Netflix to buy the company behind HBO, CNN and a famed movie studio.
On Monday, Paramount launched a hostile $77.9 billion takeover offer for Warner Bros. Discovery, competing with rival bidder Netflix to buy the company behind HBO, CNN and a famed movie studio.
Big deals that involve foreign companies are sometimes subject to national security reviews by CFIUS, a U.S. government group chaired by the Treasury Secretary that studies mergers for national-security reasons. It has the power to force companies to change ownership structures or divest completely from the U.S.
