Warner Bros Discovery Inc (NASDAQ:WBD) and Paramount Global (NASDAQ:PARA) are reportedly in talks to merge through a US$38 billion (£30 billion) deal.
According to website Axios, the chief executives of the two Hollywood giants, Warner Bros’s David Zaslav and Paramount’s Bob Bakish, met in New York on Tuesday to discuss the deal.
Consolidation of the duo's respective streaming services, Max and Paramount, to better rival the likes of Netflix and Disney+, was reportedly discussed.
Zaslav is also said to have approached Shari Redstone, chair of Paramount's parent company, over the merger, while Warner Bros have hired bankers to facilitate a deal.
Previous reports have suggested that Redstone has explored the sale of her controlling stake in Paramount.
Though far from certain that the deal will go ahead, a merger between Warner Bros and Paramount would see two of Hollywood’s so-called ‘big five’ studios joined together.
This would create a company controlling almost a third of America’s market for film distribution, with the pair each boasting big franchises such as Warner Bros’s Harry Potter and Batman, alongside Paramount’s Indiana Jones and Star Trek.
Warner Bros is the larger of the two, with a market cap of US$29 billion as of Wednesday, compared to Paramount’s US$10 billion, prompting speculation that the former would dominate a deal.