THIS MORNING: Paramount’s Gulf-backed takeover of Warner Bros. Discovery crosses the finish line

Good morning, friends. The first Riyadh AI data center for Center3 and Humain has its builders: Egypt’s Hassan Allam Construction and India’s Sterling & Wilson, at around SAR 750 mn for phase one, with 16 months on the clock. Notably, an Egyptian contractor and an Indian one signed up for a wartime deadline in the capital.

War or no war, BlackRock Investment Institute puts Saudi Arabia among the region’s largest project pipelines. The spending he expects next — traditional infrastructure, regional connectivity, defense industries, more oil pipelines to spread transport routes — is a list of things the past six months created the demand for.

Servcorp also gave a vote of confidence. It has been renting desks in the Kingdom for 17 years, predating Vision 2030, and it is now adding floors in KAFD, Olaya Tower, and STC Square.

PSAs

Businesses subject to withholding tax must file their September returns by Saturday, 10 October via the Zakat, Tax, and Customs Authority’s website, the authority said in a statement. Late payments will face a 1% penalty on the unpaid tax for every 30 days of delay.

Skydance is over the line

After objections, delays, and some serious capital commitments, Paramount’s Gulf-backed takeover of Warner Bros. Discovery is here. In a statement, Paramount announced the creation of Skydance — the company formed following the completion of the takeover and subsequent merger. Shares started trading on the New York Stock Exchange yesterday under the SKYD ticker, and Warner Bros. Discovery shares stopped trading on the Nasdaq yesterday.

A recap of how we got here: The takeover has been beset by legal challenges like an antitrust suit from 12 US states which claimed the acquisition would harm competition, cinemas, television distributors, and audiences, as well as a separate challenge brought by the Writers Guild of America. It also had to offer assurances to secure the green light from UK regulators and end its distribution tie-up with Universal in Europe to get EU approval.

The USD bn funding machine: Paramount had priced in USD 52 bn in bonds and loans to finance the takeover, and WBD shareholders got around USD 31 per share. Alongside that debt, PIF, L’imad, and QIA backed the takeover by putting up USD 24 bn in equity, as part of a USD 47 bn equity investment for the transaction. After closing, L’imad will hold 12.8% of Paramount's non-voting equity, behind PIF’s 15.1%.

The new creation: The merger has brought together the two heavyweight film studios, two streaming services, a host of cable networks including CNN and HBO, as well as a significant catalog of franchises. Skydance is also set to produce a minimum of 30 films per year.

Threatened skies

The Saudi-led coalition intercepted and destroyed a Houthi ballistic missile fired toward Khamis Mushait, SPA reported today, citing coalition spokesperson Major General Turki Al Maliki. Al Maliki named Sanaa, Saada, and Amran as the sources of the Houthi missile threat, adding that the coalition will continue to neutralize ballistic and surface-to-surface missiles and destroy their launch points.

The Houthis struck several airports and Aramco’s Rabigh refinery, warning airlines to stop operating in Saudi airspace. The group claimed that their strikes disturbed air traffic at King Khalid International Airport and caused fires at the Rabigh site. The General Authority of Civil Aviation also said that Jazan’s King Abdullah bin Abdulaziz International Airport and Najran International Airport were targeted in attacks on Monday, causing minor injuries to three people.

The group says it retains all its field gains and dismisses what it calls the other side’s “illusory victories.” The militias took ownership of multiple attacks on infrastructure and military bases, including Abha Airport, the Khamis Mushait airbase, Asir’s Aqeefah camp, and unspecified sites in Najran and Jazan. They claimed more than 200 “Saudi mobilization” fighters were killed or wounded in strikes on Ras Al Aara and Al Saqi. The Houthis also declared striking east of Al Jawf and east of Raghwan in Marib, and announced pursuing forces in Taiz.

The Saudi-backed coalition is pushing back with strikes near the strait, saying its naval forces carried out an operation in Hodeidah governorate, destroying what it called legitimate military targets such as weapons depots, storage facilities for explosive boats, and naval mines. It said the operation thwarted “imminent attacks” on waterways south of the Red Sea. The Houthis also claimed that the coalition made 60 airstrikes and a missile launch on Sanaa, Al Jawf, Taiz, Hodeidah, Saada, and Marib, over the past day, reaching over 1.5k attacks so far.

REMEMBER- Saudi-backed Yemeni forces have retaken parts of the southwest coast overlooking the strait and seized Dhubab Airport as part of a broader campaign to push back the Houthis. Forces loyal to Yemen’s government captured Dhubab district in Taiz, cutting the road to Al Makha, and also took control of the towns of Bab and Hadeid.

Still bullish

BlackRock sees Saudi Arabia as having one of the largest pipelines of projects and investment in the region, despite the war. The next investment cycle is clear and will need spending on traditional infrastructure and regional connectivity, with governments pursuing economic development, expanding defense industries, and building more oil pipelines to diversify transportation routes, BlackRock Investment Institute’s chief investment strategist Ben Powell tells Asharq Business.

Where he sees the openings: Private credit is becoming an increasingly important alternative source of financing in the Kingdom, though investors will need to stay selective and disciplined in allocating capital, Powell said. AI infrastructure is the other, supported by the Gulf’s energy availability, regulatory frameworks and human capital, with data centers and the power infrastructure needed to run them among the early beneficiaries.

Why it matters: A bullish read from the world’s largest asset manager carries weight with exactly the institutional money Riyadh is courting, and it lands while that money is pulling back. Net FDI inflows fell 19% y-o-y to SAR 19.1 bn in 2Q, after a similar 1Q, according to Gastat (pdf), while outflows rose 3% y-o-y to SAR 3.2 bn. The Kingdom is leaning on reforms to close the gap, including non-Saudi real estate ownership, opening Tadawul to direct foreign investment, rent freezes, and a revamped privatization strategy.

REMEMBER- Riyadh is targeting USD 100 bn in annual FDI inflows by 2030. The last full-year tally, SAR 122.4 bn for 2025, works out to around USD 33 bn — roughly a third of the way there.

Passport required

Saudi Arabia will regularize the status of Yemeni nationals residing in the Kingdom irregularly, according to an Interior Ministry announcement. A valid Yemeni passport is a prerequisite, with the start date and rules to be announced by the General Directorate of Passports and relevant authorities. The ministry said the move is part of Saudi Arabia's humanitarian support for the Yemeni people.

Another run at TASI

Nomu-listed National Building and Marketing is taking another shot at moving from the parallel market to Tadawul, after its board approved re-submitting a transfer request on 5 October, according to a bourse filing. The move still needs Saudi Exchange approval and is conditional on the company meeting the market’s transfer requirements.

REMEMBER- The company’s previous attempts date back to 2021, with Tadawul repeatedly flagging incomplete applications. Its latest attempt in 2022 also followed an earlier incomplete filing.

Saving for a rainy strait

Saudi Arabia and the UAE want to keep more of their crude on the Asian side of Hormuz. The two are expected to back a Japan-led push to build bigger oil reserves across Asia at the Asia Zero Emission Community (AZEC) ministerial meeting in the Philippines on Thursday, Nikkei reports. Riyadh and Abu Dhabi would supply more crude and could offer emergency priority access. Japan would fund the stockpiles through its USD 10 bn Power Asia program.

It’s a bigger version of agreements already in place: Both have asked Japan to expand their existing Japan-based crude inventories roughly tenfold from around 8 mn barrels each. Aramco also holds 5.3 mn barrels in South Korea, with Seoul holding emergency purchase rights.

Most of Asia needs the cover: Japan holds more than 200 days of oil reserves. Thailand had 61 days as of March, the Philippines 53, and Vietnam just 30.

Saudi Arabia is also cutting prices to gain back Asian buyers: Aramco set November Arab Light at a USD 5 / bbl discount to Oman-Dubai, its deepest since 2020, Reuters reported. Gulf exports are already back around pre-war levels, Reuters reported separately.

Japan isn’t going anywhere either: It sourced around 94% of its crude from the Middle East in 2025. Taiyo Oil CEO Takahiro Yamamoto wants it to stay above 90% once conditions normalize, even after Taiyo cut its own Gulf exposure to nearly 15% during the war, Bloomberg reported.

Fee waiver extended

Jazan Port has extended its storage-fee exemption for transit general cargo to 60 days, effective yesterday, the Saudi Ports Authority (Mawani) said on X.

It’s the latest in a run of fee reliefs as ships reroute around the Strait of Hormuz and the Red Sea. Mawani extended storage-fee exemption at Dammam and Jubail by 90 days in August, and Jazan has offered fee reductions of up to 50% in April. Longer grace periods give importers room and help ease port congestion as disruptions stretch transit times.

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The big story abroad

AI and rocket player SpaceX is in the market for USD 40 bn in financing to snap up Nvidia chips, Financial Times reports, citing sources familiar with the matter. The fundraising effort, which Apollo Global Management is expected to lead, seeks about USD 10 bn in bank loans and USD 30 bn in investment-grade debt, and is expected to close next year. Bond group Pimco was among a small number of lenders in talks to fund the blockbuster chip purchase.

An AI-led tech rally has rocketed the S&P 500 and Nasdaq Composite to new closing records yesterday, despite the Fed's first rate hike in three years and a months-long war that has pushed oil to USD 100 a barrel. A handful of tech giants are doing the heavy lifting, with Nvidia hitting a new all-time high after gaining 4.5% over the past week and Meta climbing 24% since mid-August, while most other stocks are falling.

More than 250k people rallied across France yesterday to back high school students demanding more education funding, according to government figures. Police used tear gas and detained nearly 500 people, and some student groups have called for new protests tomorrow.

The Gulf’s sovereign funds and largest companies are committing billions to AI infrastructure at home and to AI companies in the US and beyond. EnterpriseAM AI + Innovation reports on where that capital goes, who controls it and what it is actually buying.

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