Sovereign wealth funds in the Middle East will support Paramount’s eventual deal to buy Warner Bros

There may be a war in the Middle East that threatens to wreak havoc on the global economy, but sovereign wealth funds controlled by Saudi Arabia, Qatar and Abu Dhabi are willing to bet on an American media company.

Paramount, led by David Ellison, is close to closing a deal with the Saudi Public Investment Fund, Qatar Investment Authority and Abu Dhabi’s Limad Holding Company to provide $24 billion in equity support for its $111 billion acquisition of Warner Bros. Discovery, Paramount said. The Wall Street Journal. Of the $24 billion, $10 billion will come from the Public Investment Fund.

The capital will help offset costs incurred by Oracle founder Larry Ellison and Red Bird Capital Partners, which have agreed to back David Ellison’s deal. Foreign investors are not expected to hold any position on the management or board of directors.

Paramount exposed foreign backers when it launched its hostile bid for Warner last year. China’s Tencent and Jared Kushner’s Affinity Partners were also involved at various points, although neither were said to be involved in the new deal. However, there is still room to raise more shares, and Paramount says it plans to raise new shares as part of the deal. It’s not clear if Paramount will officially reveal all the equity partners.

But the Middle East funds have also raised concerns from Democratic lawmakers, who are urging a review by the Federal Communications Commission or the Committee on Foreign Investment in the United States, despite the funds having no governance or operational authority.

Sovereign wealth funds in the Middle East are investing heavily in US media assets, with the Public Investment Fund also supporting the acquisition of video game giant Electronic Arts, in addition to several other smaller investments in this field.

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