EU clears Paramount-WBD merger as US judge issues temporary block

The $111 billion merger of Paramount Skydance and Warner Bros. Discovery received conditional approval from the European Commission on Wednesday, while simultaneously facing a 14-day temporary restraining order from a US federal judge who agreed with 12 states that the deal likely violates antitrust law.

EU conditional clearance

The European Commission approved the merger after Paramount agreed to end its film distribution joint venture with Universal Pictures (United International Pictures) in Europe within 13 months of closing, and not to re-enter such an agreement for 10 years. Source: latimes Regulators found that enough competitors remain at the production level, including Disney, Sony, and Amazon MGM. Source: ground-news Notably, Paramount was not required to divest Cartoon Network. Source: latimes

US legal challenge

On Monday, US District Judge Araceli Martínez-Olguín granted a temporary restraining order, halting the deal for 14 days. The judge noted that the merged company would control 27% of the wide-release theatrical distribution market, a share that "presume[s] the proposed merger is likely to violate antitrust laws." Source: arstechnica A hearing for a preliminary injunction is set for August 3. Source: theverge

California Attorney General Rob Bonta hailed the order as "a critical first win." Source: foxbusiness The states argue the merger would reduce competition and raise prices. Source: bbc If the deal is not closed by September 30, Paramount will owe Warner Bros. shareholders a ticking fee of roughly $650 million per quarter. Source: thenextweb

The deal had already been cleared by the US Department of Justice in June, but the state lawsuit has opened a second front. Source: theguardian The UK is also considering intervention. Source: theguardian