EU Approves Paramount's $110 Billion Warner Bros. Discovery Acquisition
The European Commission grants conditional approval for the mega media merger, while U.S. regulatory challenges persist.
European Union regulators have granted conditional approval for Paramount's $110 billion acquisition of Warner Bros. Discovery. The European Commission announced its decision Wednesday, stating the approval is contingent upon full compliance with commitments offered by Paramount.
Paramount, led by David Ellison, agreed to several concessions to secure the merger's approval. These include terminating its stake in the film distribution venture United International Pictures within 13 months of the deal's closing. The company also pledged not to enter into any distribution agreements with NBCUniversal for 10 years.
The EU concluded that sufficient competition exists within the region, alleviating concerns about market dominance, particularly in film distribution. Paramount anticipates closing the deal this fall.
Despite the EU's approval, the acquisition faces significant hurdles in the United States. A federal judge recently issued a temporary restraining order blocking Paramount from closing the deal for 14 days, following a lawsuit filed by 12 Democratic state attorneys general. The states are raising antitrust concerns, arguing the combined entity would control nearly one-third of the U.S. theatrical film distribution market and a substantial portion of basic cable programming.
A hearing is scheduled for August 3 to address the states' motion for a preliminary injunction. Paramount and Warner Bros. executives were reportedly expecting this judicial pause, but the critical deadline for closing the merger is October 1. Failure to complete the transaction by this date will trigger a costly "ticking fee," amounting to an additional $7 million per day.
The proposed merger would unite various media assets, including HBO Max, Paramount+, HBO, CBS, CNN, and numerous film titles, under a single company. Critics, including the SAG-AFTRA union, have expressed concerns that the merger could reduce competition and lead to increased consumer prices.
Further scrutiny is also coming from the United Kingdom, where Culture Secretary Lisa Nandy has indicated an intention to intervene in the deal. Additionally, David and Larry Ellison are facing a lawsuit from a Paramount shareholder alleging a "backdoor deal" with former President Trump to secure regulatory approvals. The acquisition's potential control of CNN has also drawn attention, given Trump's past criticisms of the network.