Tencent Holdings is considering a fresh investment of several hundred million dollars in Paramount Skydance’s $110bn acquisition of Warner Bros. Discovery, according to people familiar with the matter cited by Bloomberg.

Tencent would participate as a passive financial investor if it proceeds with the investment. The company previously committed $1bn to the deal but withdrew after Warner Bros. raised concerns that Chinese participation could create regulatory challenges in the US. 

The takeover, led by David Ellison, is supported by a $47bn equity package backed by the Ellison family and RedBird Capital Partners.

The transaction also includes $54bn of debt commitments arranged by Bank of America, Citigroup, and Apollo Global Management.

Tencent already holds a minority non-voting stake in Paramount and has collaborated with Skydance on several productions. The Chinese technology group has also supported distribution and marketing for Skydance films since making a strategic investment in the studio in 2018.

The potential new investment would further strengthen the financial backing for one of the largest media transactions in recent years, though Tencent could still decide not to proceed.

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