It took over a month for Paramount Skydance to convince Warner Bros shareholders and management that it is offering a better deal than Netflix. However, it seems the US-Iran war may change all the equations. The ongoing may lead to some unexpected collateral damage to Paramount’s pending deal to purchase Warner Bros Discovery. Reason being a big chunk of the proposed financing coming from Middle Eastern sovereign wealth funds. The Paramount is reported to currently count on at least $24 billion in funding from Saudi Arabia’s Public Investment Fund (PIF), the Qatar Investment Authority (QIA), and the Abu Dhabi Investment Authority (ADIA).
According to a report in Financial Times, the proposed $111 billion takeover agreement included a significant amount of money coming from Middle Eastern sovereign wealth funds, but now that the Gulf countries are engulfed in a war, they may start reconsidering some of their investments. The three of the four largest Gulf countries—which include Saudi Arabia, the United Arab Emirates, Kuwait, and Qatar—have reportedly started discussions regarding how the war is hurting their pockets already, and are “reviewing current and future investment commitments in order to alleviate some of the anticipated economic strain from the current war.
” This may become bad news for Paramount CEO David Ellison and his $31 per share offer to acquire Warner Bros. Discovery into his empire.
China’s Tencent makes entry
While none of the countries backing Paramount’s WB takeover have pulled out as yet, Bloomberg reported that Chinese tech giant Tencent was recently brought into a new round of funding to help Paramount make its purchase. According to the report, Tencent Holdings plans to invest several hundred million dollars in Paramount’s acquisition of Warner Bros. Discovery, quoting people familiar with the situation. The Chinese company would reportedly be acting as a passive financial investor.
Paramount’s offer for Warner Bros. in December 2025 included a $1 billion equity commitment from Tencent, according to a filing at the time. However, the same was withdrawn after Warner Bros. raised concerns that the Chinese company’s presence could lead to national security challenges with US regulators. As Chinese ownership of US assets has been a cause for concern. Tencent already holds a minority nonvoting stake in Paramount. It also has co-financed films produced by Skydance.
Netflix exit from Warner Bros acquisition battle
Late last month, streaming giant Netflix backed away from its proposal to buy Warner Bros Discovery, clearing the way for Paramount Skydance to win a months-long battle for one of Hollywood’s most storied studios in a deal worth around $111 billion. Warner Bros, which put itself up for sale last year, said that Paramount’s latest bid was “superior” to the one from Netflix, which in turn refused to raise its offer. On their part, Netflix executives said that they have declined to match Paramount’s bid as “the deal is no longer financially attractive” at that price.
