A federal judge approved the states' settlement, setting up an close at $31.0167 a share and leaving merger-arbitrage traders a sliver of spread.
The meter that Warner Bros. Discovery shareholders had been watching will run for less than a week.
The final legal obstacle fell Wednesday afternoon, when U.S. District Judge Araceli Martínez-Olguín signed off on the settlement Paramount Skydance reached with state antitrust enforcers. She also entered a consent decree and amended the order that had blocked the companies from closing. She described the agreement as a "fair, reasonable, and good faith approach to address the competitive harms."
Paramount and Warner Bros. Discovery then said they expect to close the merger on , subject to customary conditions.
The price of a short delay
Under the deal terms, each Warner share converts into $31.00 in cash plus a ticking fee of $0.00277778 for every calendar day after . An closing works out to $31.01666668 a share.
Across roughly 2.51 billion Warner shares, six days of ticking fee comes to about $42 million. The risk case had been a delay running toward a cap of roughly $650 million a quarter. The approval removed most of that exposure in a single ruling.
Warner closed Wednesday at $30.95, up 0.32%, on 84.5 million shares, about three times normal volume. That leaves a spread of about 6.7 cents, or 0.22%, to the anticipated payout. Spread over the six days to closing, the return annualizes to roughly 13%, a sign traders still assign a small but real probability to a hiccup. Paramount shares rose 3.4% to $10.33.
What Paramount agreed to
The settlement attaches five years of conditions. Paramount must put out at least 30 films a year for the first two years and 32 a year for the next three, negotiate cable affiliation deals separately, increase annual U.S. production spending by $300 million, and keep an independent editorial board overseeing CBS News and CNN. Uncured material violations can trigger divestiture remedies.
Those commitments constrain the cost savings that typically justify a deal of this size, which matters given how it is financed.
A balance sheet built in the bond market
To fund the $110 billion combination, Paramount has lined up $30 billion of investment-grade bonds, about $12.4 billion of high-yield debt and $9.46 billion of loans, nearly $52 billion in total. Strong demand let the company cut pricing on the investment-grade portion. The timing is notable: the debt was placed as the 10-year Treasury yield climbed to its highest level since 2002, locking in borrowing costs off the highest benchmark rates in more than two decades.
What to watch
The closing announcement on or around is the next marker, along with the new company's name. After that, the focus shifts to whether Paramount can service its new debt while meeting the decree's spending and output floors.