Tencent Exits Paramount Bid for Warner Bros Amid US Regulatory Concerns
- tech360.tv
- 3 hours ago
- 2 min read
Chinese social media and gaming company Tencent Holdings has withdrawn as a financing partner from Paramount Skydance's USD 108 billion bid to acquire Warner Bros Discovery. This decision follows concerns about heightened scrutiny of foreign investment in the United States.
Warner Bros had expressed concern that Tencent's involvement as a non-US equity financer might prompt a review by the Committee on Foreign Investment in the United States (CFIUS). Paramount confirmed this in its regulatory filing.
Tencent had pledged USD 1 billion towards Paramount's initial proposal for Warner Bros. The Shenzhen-based company was later removed from Paramount's updated all-cash offer of USD 30 per share.
The company stated in its revised proposal to Warner Bros, "Tencent will no longer be a financing partner in the transaction." This change aims to simplify the transaction's regulatory pathway.
Tencent's attempt to secure a financial role in this significant deal highlights the increasing US regulatory oversight. This scrutiny is notably impacting Chinese investment in major US media and technology transactions.
Tencent, a Hong Kong-listed company, is recognised as China's most valuable technology conglomerate. It operates the super app WeChat, also known as Weixin in mainland China.
The company also manages popular game titles, including Honor of Kings, PUBG Mobile, and League of Legends. Tencent reported a market capitalisation of approximately USD 700 billion.
At the end of Sept., Tencent held over USD 20 billion in cash and equivalents. This financial strength provides significant capacity for overseas acquisitions.
The company already possesses stakes in several US technology and gaming firms, such as Epic Games and Snap Inc. However, Tencent's operations in the US have faced increased scrutiny.
The US Department of Defence designated Tencent a "Chinese military company" since January 2025. Tencent has strongly denied this label.
Tencent's USD 1 billion commitment was not considered central to Paramount's overall bid for Warner Bros. Other financing partners, including three Middle Eastern sovereign wealth funds and Affinity Partners, agreed to revised terms to avoid CFIUS jurisdiction.
Three Middle Eastern sovereign wealth funds—Saudi Arabia’s Public Investment Fund, Abu Dhabi’s L’imad Holding Company PJSC, and the Qatar Investment Authority—are part of the revised offer. Affinity Partners, the private equity firm founded by former White House adviser Jared Kushner, is also involved.
These entities have agreed to forgo governance rights, including board representation. Such revisions aim to ensure the proposed Paramount-Warner Bros transaction avoids falling under CFIUS jurisdiction.
Paramount's USD 108 billion offer is in competition with Netflix's USD 72 billion acquisition plan. This reflects the intense battle among global streaming and media giants for control of a major Hollywood studio.
Tencent Holdings withdrew as a financing partner from Paramount Skydance’s USD 108 billion bid for Warner Bros Discovery.
The withdrawal resulted from Warner Bros' concerns that Tencent's involvement could trigger a review by the Committee on Foreign Investment in the United States (CFIUS).
Tencent had initially pledged USD 1 billion to the acquisition proposal but was later removed from the revised offer.
Source: SCMP
