Merger in sight? Warner Bros. Discovery and Paramount Global, in 'preliminary" negotiations to unify

Warner Bros. Discovery and Paramount Global, two of the world's largest production companies, could soon unify. As revealed by Axios, the CEOs of both companies met on Tuesday in New York to discuss a possible merger.

The negotiations, described as being in a "preliminary" phase, took place at Paramount's headquarters in Times Square. There, David Zaslav, CEO of Warner Bros. Discovery, and Bob Bakish, CEO of Paramount Global, met, as reported by Axios and later confirmed by Variety. Not only that, Zaslav also discussed the deal with Shari Redstone, owner of Natural Amusements Inc., Paramount's parent company.

What would Warner Bros. Discovery and Paramount Global gain with a merger?

The merger would create a giant not only in news, but also in the entertainment industry, where Warner Bros. Discovery would have more power with a higher market value and lower debt than Paramount Global. According to Variety, Warner has a market cap of $28.4 billion, while Paramount Global shares are worth $10.3 billion.

In terms of debt, Warner has more than Paramount, with $43.5 billion, compared to Paramount's $15.6 billion. However, what is considered a greater consolidation of the industry would not be equitable, since Warner Bros. Discovery would surely have more power and shares compared to Paramount.

Both companies would be seeking to unify their assets in television, cinema, sports and streaming. However, the main interest of both companies would be in the latter, streaming platforms, specifically Max and Paramount+, as their union could allow them to be more competitive with platforms such as Netflix and Disney+.