US FCC approves foreign investment in Paramount Warner merger

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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