Topline
Paramount’s hostile bid to acquire Warner Bros. is raising national security concerns, two House Democrats said Wednesday, citing financial backing from Middle Eastern sovereign wealth funds they worry could give foreign nations control or influence over American data and content.
Paramount announced a hostile takeover bid for Warner Bros. on Monday.
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Key Facts
Paramount’s deal includes financing from three Middle Eastern sovereign wealth funds: Saudi Arabia’s Public Investment Fund, the Qatar Investment Authority and Abu Dhabi’s L’imad Holding Company, located in the United Arab Emirates, which agreed to contribute an aggregate $24 billion toward the $108.4 billion deal.
The bid is also backed by Affinity Partners, the private equity firm founded by President Donald Trump’s son-in-law Jared Kushner, which received $2 billion in funding from the Public Investment Fund in 2021 and partnered with the fund to purchase video game giant Electronic Arts in a $55 billion deal earlier this year.
In a letter sent Wednesday, two Democratic representatives on the House Financial Services Committee warned that any deal that provides “governance rights, access to non-public data, or indirect influence over content distribution” could be exploited by foreign nations.
However, the three sovereign wealth funds and Affinity Partners agreed to forgo governance rights, including board seats, should the deal go through, according to Paramount’s Securities and Exchange Commission filings.
Warner Bros. and Paramount did not immediately return a request for comment from Forbes.
What Are Democrats Warning About?
Rep. Sam Liccardo, D-Calif., and Rep. Ayanna Pressley, D-Mass., sent a letter to Warner Bros. CEO David Zaslav on Wednesday, asking the company to file a voluntary notice with the Committee on Foreign Investment in the United States should the company seek to finalize a deal with Paramount. Paramount’s SEC filing states the deal would not be subject to review by the Committee on Foreign Investment in the United States, although Liccardo’s office recommended Warner Bros. immediately file with the agency in a press release Wednesday.