Fitch Ratings has downgraded Paramount Global's credit rating to junk territory (BB+) from investment grade (BBB-) due to uncertainties surrounding its proposed acquisition of Warner Bros.
Discovery. The downgrade reflects competitive pressures in the media sector, ongoing free cash flow headwinds, and significant transformation costs.
Fitch cited potential credit risks associated with the debt-funded nature of the deal, substantially higher leverage, and an unclear financial policy post-acquisition. This action follows similar reviews for potential downgrades by Moody's and S&P Global.
Paramount's offer for Warner Bros. Discovery is valued at $110 billion, with the combined entity expected to carry approximately $79 billion in net debt.
The article also notes Paramount's payment of a $2.8 billion fee to Netflix related to a prior deal with Warner.
Fitch Downgrades Paramount After Warner Bros. Deal Announcement(current)
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