Warner Bros and Paramount in early merger talks

Warner Bros Discovery and Paramount Global were said to be in early merger talks, a deal that would ring together two of Hollywood's 'Big Five' studios.

According to Axios, Warner chief executive David Zaslav and Paramount head Bob Bakish recently discussed a potential deal over lunch in New York.

Warner and Paramount, which would have a combined market value of approximately $38.0bn, have been forced to undertake deep cost-cutting exercises in an attempt to stem streaming service losses as they look to compete with the Lukes of Netflix, Amazon Video, Disney+, and Apple TV.

The chief executives apparently discussed how each company's main streaming service, Paramount Plus and Max, could merge in order to better take on rivals. Paramount Plus total subscribers stand at 63.4m and Warner Bros Discovery counted 95.0m users among their numbers, while Netflix recently reported 247.2m global subscribers.

As of 0845 GMT, Warner shares were down 0.26% in pre-market trading at $11.63 each, while Paramount shares were 0.32% lower at $15.45 each.

Reporting by Iain Gilbert at Sharecast.com