EU Approves Paramount-Warner Merger With Conditions; US Court Halts Deal

The proposed $110 billion merger between Paramount Skydance and Warner Bros. Discovery has received conditional approval from the European Commission, while simultaneously being temporarily blocked by a US federal judge. The contrasting regulatory outcomes reflect the high stakes involved in creating a new media powerhouse.

EU Approval With Conditions

The European Commission cleared the deal after Paramount agreed to exit United International Pictures (UIP), its joint distribution venture with Universal Pictures, within 13 months of closing. Paramount also committed to not entering new joint distribution agreements with Universal in the European Economic Area for 10 years Source: euronewses, abces. The Commission concluded that these measures fully address competition concerns regarding film distribution Source: mileniomx.

US Legal Hurdles

In the United States, a coalition of 12 states led by California filed an antitrust lawsuit to block the merger, alleging it would stifle competition and raise prices. On July 20, Judge Araceli Martínez-Olguín issued a 14-day temporary restraining order halting the transaction pending a hearing on August 3 Source: lavozar, abces. Paramount has requested a three-day evidentiary hearing in late August to challenge the injunction Source: infobae.

Additional Opposition

The Writers Guild of America (WGA) has also filed for a preliminary injunction, arguing the merger would cause massive job losses and reduce writer compensation Source: elnacionalve. Paramount counters that the deal will foster competition and create more opportunities Source: elnacionalve. If the merger is not completed by September 30, Paramount faces a daily penalty of approximately $7 million to Warner Bros. shareholders Source: larepublicaco.

What's Next

The August 3 hearing will determine whether the temporary halt is extended. Meanwhile, the UK is considering intervention on public interest grounds Source: larepublicaco.