Three investment groups from The Middle East have committed to providing $24 billion to support Paramount Skydance Corp.’s acquisition attempt of Warner Bros. Discovery Inc. The financial involvement from this region in the transaction is probably greater, considering its extensive connections with the private equity companies backing the offer.
TL;DR
- Three Middle Eastern investment groups committed $24 billion to support Skydance Corp.’s bid for Warner Bros. Discovery Inc.
- Saudi Arabia’s PIF, Qatar Investment Authority, and Abu Dhabi’s L’imad Holding Co. are backing the offer.
- Investors will provide funding via non-voting equity stakes, relinquishing control rights to avoid CFIUS approval.
- This move reinforces the trend of Middle Eastern entities becoming global financiers, supporting diverse industries.
Saudi Arabia’s Public Investment Fund and the Qatar Investment Authority joined the relatively-unknown Abu Dhabi firm L’imad Holding Co. To bankroll the hostile offer earlier this week. The funds are overseen by wealthy Gulf states that have long supplied large amounts of capital to global buyout firms.
One instance is Apollo Global Management Inc., which is among the companies extending up to $54 billion in funding for The Paramount bid. Abu Dhabi’s Mubadala Investment Co. Has a well-established connection with Apollo, and the PIF’s investment division has invested in capital managed by The American company.
The Saudi Public Investment Fund, in conjunction with The Qatar Investment Authority and Abu Dhabi's Lunate, has likewise directed vast sums of money toward Affinity Partners. Jared Kushner's company also has connections to Mubadala, following a joint investment in a Brazilian quick-service restaurant business alongside a division of the Abu Dhabi-based organization.
The Public Investment Fund's pursuit of Warner Bros. Occurs merely months following the PIF's collaboration with Affinity on another notable offer, a $55 billion acquisition of Electronic Arts Inc. Kushner facilitated the connection between the parties and was instrumental in the discussions, according to Bloomberg News at that period.
This iteration also features notable individuals such as Larry Ellison, the wealthy magnate with strong connections to the area. The investors from The Gulf intend to supply funding via equity stakes that don't grant voting privileges, and they've consented to relinquish any control rights, which would assist in guaranteeing the bid wouldn't require endorsement from The Committee on Foreign Investment in the US.
The Middle East’s latest attempt reinforces a years-long trend that’s seen regional entities emerge as bankers to the world. Collectively, five wealth funds controlled by Abu Dhabi, Qatar and Saudi Arabia deployed $82 billion last year, accounting for more than 60% of all sovereign wealth fund investments, according to Global SWF.
This funding has supported deals in various industries, including financial services and AI, as administrations aim to cultivate fresh economic drivers apart from petroleum.
Should Warner Bros. Be acquired, an additional benefit would be the expansion of soft power. If this deal goes through, investors from The Middle East might acquire ownership in prominent assets such as Warner Bros.' Television and movie production facilities, the HBO enterprise, and various cable networks, CNN among them.
This potential outcome eventually united financial backing from The United Arab Emirates, Saudi Arabia, and Qatar in a single deal for the first time in a considerable period. These nations collectively manage more than $3 trillion in state-owned investment funds, and agreements featuring all three are uncommon.
“This means that either the deal is too good to pass, or there is a third party — say Affinity Partners — putting them together,” said Diego Lopez, founder and managing director at Global SWF, which tracks wealth funds.
