By David Shepardson
WASHINGTON, Sept 17 (Reuters) – The Federal Communications Commission approved a Paramount Skydance request to allow foreign investors to back its $110 billion acquisition of Warner Bros Discovery but said they could not hold voting stock.
A group of Democratic senators had raised concerns about Middle Eastern sovereign wealth funds taking stakes.
In a decision released by the FCC’s media bureau on Thursday, the commission said it was waiving the 25% cap on foreign equity ownership and said individual investors could own up to 20% of the equity.
It also said foreign investors can have no voting stock and “will not have any influence, direction, or control over or provide any commentary or guidance on Paramount’s content decisions, company management,” or access to non-public data on US citizens.
Paramount praised the approval and said it followed a review by a US government committee of national security officials known as “Team Telecom” after ensuring that foreign investors will not have access to personal data of US citizens.
“A combined Paramount-WBD will have the scale and resources necessary to compete, invest, innovate, and deliver premium content to audiences worldwide,” the company said.
A US judge has temporarily blocked the takeover pending a trial in March on a legal challenge filed by a dozen US states. The Justice Department and FCC previously approved the merger.
Paramount said when the deal closes, the family headed by billionaire and Oracle co-founder Larry Ellison and RedBird Capital Partners will collectively hold the largest equity stake in the combined company and 100% of the voting shares, with no other equity participant having any governance rights.
The FCC said Middle Eastern investors could own about 85% of the equity in Paramount after the deal closed, including 15.1% for the Saudi Arabia Public Investment Fund. Paramount said sovereign wealth funds would own 38.5% after the deal closed.
Democratic FCC Commissioner Anna Gomez said on Thursday, “The FCC just let some of the most repressive governments in the world indirectly control nearly all of a combined Paramount-Warner Bros. An investment this large in one of America’s biggest media companies doesn’t just buy equity, it secures influence over what gets said and what gets made.”
(Reporting by David Shepardson; Editing by Sonali Paul)
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