Topline
The European Union on Wednesday approved Paramount Skydance’s $110 billion takeover of Warner Bros. Discovery, clearing a major regulatory hurdle even as the deal faces pushback in the U.S. over concerns the agreement violates antitrust law.
Key Facts
The European Commission said in a statement Paramount’s deal for Warner Bros. was approved after Paramount agreed to concessions that regulators said “fully address” competition concerns.
Paramount agreed to divest its stake in a film distribution joint venture with United International Pictures in Europe and not enter any film distribution deal with Universal Pictures in Europe for the next 10 years, according to the European Commission.
Clearance in Europe marks a regulatory milestone for the transaction to be completed, with further approval required from regulators in the U.S. and the U.K., whose Competition and Markets Authority said it would conclude a preliminary antitrust probe by Aug. 7.
what to watch for
Judge Araceli Martinez-Olguin, who temporarily blocked Paramount’s merger on Monday after ruling states raised “serious questions” about whether the takeover violated antitrust law, scheduled a hearing for Aug. 3. Martinez-Olguin may issue a more lasting order that could further pause the deal, potentially keeping the merger on hold indefinitely as litigation moves forward.
big number
$7 million. That’s how much Paramount agreed to pay each day if its deal for Warner Bros. fails to close by Sept. 30, amounting to about $650 million per quarter. Paramount would also pay a $7 billion termination fee if the deal falls through because of regulatory issues.
key background
Paramount’s deal for Warner Bros. was announced in February after Netflix ended its own bid for the legacy media firm. The planned merger has faced scrutiny, including from Paramount+ subscribers who sued over the deal, arguing it could raise subscription prices. The Writers Guild of America sued to block the transaction, claiming it could harm film and television writers by reducing competition in the industry. Martinez-Olguin’s recent ruling appeared to support a lawsuit filed by 12 states, which argued the merger could lead to the “decline of theatrical exhibition of films.” The Justice Department cleared the deal in June, concluding the deal was “not likely to result in harm to competition or American consumers.”