Paramount is reportedly preparing a cash bid to acquire Warner Bros. Discovery, including the declining global networks business. The bid amount is undisclosed. Both companies are looking to consolidate their streaming services to compete better in the industry. Paramount has easy access to capital, but Warner has a higher market cap and net debt.

The merger is expected to save costs and unlock hidden value in both firms by reducing the number of streaming platforms. The combined entity would be well-positioned in the streaming industry. Both companies currently rely heavily on linear TV revenue, but this merger could help offset those losses. Fair value estimates for both firms remain at $20.

Morningstar’s analysis emphasizes the need for consolidation in the streaming industry to remain profitable. The combination of Paramount and Warner Bros. Discovery could address the challenges faced by both companies in the changing media landscape. The potential merger would benefit consumers by streamlining content offerings and platforms.

Read more at Morningstar: Suggested Merger Makes Sense, but Timing Would Be Surprising