(CNN) –– Warner Bros. Discovery CEO David Zaslav met with Paramount Global CEO Bob Bakish on Tuesday and discussed a possible merger between the companies, two people familiar with the matter told CNN.
The possible merger of these two media giants would create a news and entertainment giant that would include the Warner Bros. and Paramount studios as well as CBS, CNN and other cable television networks.
The meeting, first reported by Axios, took place at Paramount's headquarters in New York's Times Square.
Spokespeople for Warner Bros. Discovery and Paramount declined to comment.
Although a possible merger between the two companies could once again upend the media industry, the talks are not a complete surprise. Zaslav, who has made a number of acquisitions at Discovery, has spoken in recent months about seeking additional assets to expand Warner Bros. Discovery's content offering.
Meanwhile, Paramount needs a strategic partner to compete in today's media landscape. Shari Redstone, the family heiress to Paramount parent company National Amusements, has reportedly been in talks to sell her shares in the company.
Analysts expect consolidation in the media business to continue as traditional entertainment companies step up their efforts to compete with Silicon Valley tech titans increasingly moving into the content space.
However, investors weren't happy: Warner Bros. Discovery (WBD) shares fell immediately after the release of the Axios report, ending the day down 5.7%. It fell another 1.4% in after-hours trading. Following the report, Paramount shares initially rose but then fell a little less than 1%.