March 2 (Reuters) - The Warner Bros-Paramount Skydance

merger will create a combined entity that would have a net debt

of about $79 billion, Paramount said on Monday, as it

ruled out any plan to divest or spinoff the cable assets.

This was disclosed by Paramount CEO David Ellison in a call

with analysts after signing the $110 billion, or $31-per-share,

deal for Warner Bros early on Friday, after Netflix ( NFLX ) declined to

raise its offer.

The two companies will fold their streaming services into a

single platform, Ellison said, giving Paramount the scale and

firepower needed to compete more effectively in a market

dominated by Netflix ( NFLX ).

Ellison said together the companies already serve more than

200  million direct-to-consumer subscribers in more than 100

regions.

"Unlike Netflix ( NFLX ), Paramount's business could use a shot in

the arm and an immediate boost to achieve the greater scale it

needs," said Matthew Dolgin, senior analysts at Morningstar.

The merger will also unite Paramount's CBS, MTV, Comedy

Central and BET with Warner's networks including CNN, HBO, TNT,

and Food Network.

The merged entity will have one of the industry's deepest

libraries of commercially proven intellectual property, uniting

franchises such as "Game of Thrones", "Mission Impossible",

"Harry Potter", "Top Gun", the DC Universe and "SpongeBob

SquarePants".

THE LONG-DRAWN BIDDING CONTEST

The contest for Warner Bros' studio and streaming assets

heated up over months, with Paramount and Netflix ( NFLX ) trading rival

takeover bids.

Netflix ( NFLX ) struck first, signing a deal early in December to

buy those assets, excluding cable networks, for $27.75 per

share, or $82.7 billion.

After Warner's board deemed the Paramount proposal superior,

Netflix ( NFLX ) declined to match the offer, stepping back from the

high-stakes battle for assets, including DC Comics, HBO and HBO

Max.

TheParamount-Warner Bros deal would also remove doubts

surrounding the value and risk of the cable networks spinoff

that Warner shareholders would have retained under the Netflix ( NFLX )

proposal, reducing one of the key variables that had added to

doubts around Netflix's ( NFLX ) bid.

The combined entity is expected to produce at least 30

theatrical films a year, while maintaining both Warner Bros and

Paramount studios.

Paramount paid the $2.8  billion termination fee that Warner

owed Netflix ( NFLX ) on Friday. The deal is expected to close in the

third quarter this year.

DEAL SPARKS CONCERN OVER COMPETITION

The deal is expected to easily win European Union antitrust

approval, with any required divestments likely to be minor,

Reuters reported on Friday, citing sources.

Paramount, led by David Ellison, son of billionaire Larry

Ellison, has deep ties to the Trump administration, a factor

some analysts said could help it secure more favorable

regulatory treatment.

However, the deal has drawn scrutiny from California State

Attorney General Rob Bonta who said the state is already

investigating the deal and will be "vigorous" in its review.

Cinema operators have also warned that combining two major

Hollywood studios could cost jobs and shrink the number of films

released in theaters.