China’s Tencent Exits Financing for Paramount Skydance’s Warner Bros. Bid

Paramount has launched a $30-per-share hostile bid valued at $108.4 billion.

Paramount Global headquarters in Times Square in New York City. Michael M. Santiago/Getty Images

Chinese tech group Tencent Holdings has withdrawn from Paramount Skydance Corp.’s financing plan for its proposed takeover of Warner Bros. Discovery, removing a major non-U.S. backer from one of Hollywood’s most contentious merger battles, according to a revised filing with the Securities and Exchange Commission (SEC).

Paramount disclosed in a Dec. 8 amendment that the Chinese gaming and social-media conglomerate had withdrawn its $1 billion funding commitment.

“Tencent will no longer be a financing partner in the transaction,” the document said.

The company added that Tencent’s involvement had raised concerns about “another non-U.S. equity financing source.” The move comes just days after Paramount launched a $30-per-share, all-cash tender offer for Warner Bros. Discovery on Dec. 8, valuing the target at about $108.4 billion.

The hostile bid followed Warner Bros.’s rejection of a similar proposal from Paramount last week.

Gulf Funds Forgo Governance Rights

The revised filing shows that although Tencent has exited, three Gulf sovereign wealth funds backing the offer—the Public Investment Fund of Saudi Arabia, L’imad Holding Company PJSC of Abu Dhabi, and the Qatar Investment Authority—have agreed to relinquish governance rights that would normally accompany equity stakes.

The commitments, totaling $24 billion, were structured to avoid triggering deeper review by the Committee on Foreign Investment in the United States (CFIUS), which examines foreign investments for national-security risks.

Paramount said its financing partners, including the three sovereign funds and Affinity Partners, “have agreed to forgo any governance rights—including board representation—associated with their non-voting equity investments. Accordingly, the Transaction will not be within CFIUS’s jurisdiction.”

Large deals involving foreign backers often draw scrutiny from CFIUS, an interagency panel chaired by Treasury Secretary Scott Bessent, which can mandate restructuring or even force divestiture if it finds a national-security risk.

Bid Escalates Rivalry

Paramount’s move follows Netflix’s agreement earlier this month to acquire Warner Bros. Discovery for $72 billion in equity, after outbidding Paramount and Comcast.

Netflix announced the acquisition agreement on Dec. 5, saying Warner Bros. shareholders would receive $23.25 in cash and $4.50 in Netflix stock per share, valuing the company at $27.75 per share and implying an enterprise value of about $82.7 billion.

The companies expect the deal to close in the third quarter of 2026.

Paramount has appealed to Warner Bros. shareholders, saying its offer “will create a stronger Hollywood.”

It has assembled support from RedBird Capital, the Ellison family, and $54 billion in debt commitments from Bank of America, Citi, and Apollo Global Management.

The tender offer remains open through Jan. 8, 2026, with withdrawal rights available through that date, according to the SEC filing.

Scrutiny

Political scrutiny escalated even before Tencent’s withdrawal. President Donald Trump said on Dec. 7 that he planned to “be involved” in deciding whether the Netflix–Warner Bros. merger should proceed.

He told reporters at the Kennedy Center Honors that economists would need to assess whether the combined entity’s “big market share ... could be a problem.”

Lawmakers from both parties have warned that Netflix’s acquisition could entrench its dominance in streaming.

Industry unions echoed those concerns. The Writers Guild of America (East and West) said on Dec. 5 that the world’s largest streamer acquiring a top competitor was precisely “what antitrust laws were designed to prevent,” warning it would eliminate jobs, suppress wages, and reduce content diversity.