The Chinese company would participate as a passive financial investor, the sources said, requesting anonymity because the discussions are private, News.Az reports, citing Bloomberg.
Paramount’s initial offer for Warner Bros. in December included a $1 billion equity commitment from Tencent, according to a regulatory filing at the time. However, that commitment was later withdrawn after Warner Bros. raised concerns that Tencent’s involvement could trigger national security scrutiny from US regulators. Following revisions to the offer, Warner Bros. agreed to be acquired by the company led by David Ellison in a deal valued at about $110 billion.
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Sources cautioned that Tencent could still decide not to proceed with the investment and that the transaction may take time to complete.
Chinese ownership of US assets has increasingly drawn attention in Washington, contributing to heightened scrutiny of deals involving Chinese companies. This year, concerns over national security were also raised during negotiations over the US operations of TikTok.
Meanwhile, Supercell—which is owned by Tencent—said earlier this month that it is cooperating with a US security investigation into its parent company’s data practices.
Tencent already holds a minority nonvoting stake in Paramount Global. The company has also co-financed films produced by Skydance Media and has assisted with the marketing and distribution of the studio’s major releases since making a strategic investment in Skydance in 2018.
Paramount’s acquisition of Warner Bros. is being financed with $47 billion in equity backed by the Ellison family and RedBird Capital Partners. Additional strategic financial partners could join when the transaction closes. The deal is also supported by $54 billion in debt commitments from Bank of America, Citigroup and Apollo Global Management.
Existing Paramount shareholders may also have the opportunity to participate in a rights offering of up to $3.25 billion in Class B stock alongside the new equity investment.
