Topline
Paramount Skydance’s acquisition of Warner Bros. Discovery was greenlit by the Justice Department on Friday, clearing a massive regulatory hurdle for the $111 billion deal that has garnered scrutiny from some state attorneys general.
Key Facts
The Justice Department’s antitrust division said in a statement its investigation of the merger found the “transaction is not likely to result in harm to competition or American consumers.”
The statement also said the division believed the merger would not harm the streaming industry, linear television or the “studio development, production, or distribution of films for theatrical release,” the latter of which became a point of contention when Netflix was in the running to acquire Warner Bros. and was viewed as the company less likely to prioritize theatrical releases.
The Justice Department noted in its statement that because Netflix and Paramount were once in a competitive bidding process for Warner Bros., the antitrust division’s review of the competitive impacts of Paramount’s acquisition of Warner Bros. came before the two reached a definitive deal.
Paramount has offered $111 billion for Warner Bros. and is specifically looking to acquire the company’s film and television production assets, its streaming platforms like HBO Max and its cable networks including CNN.
Forbes has reached out to Paramount for comment.
What To Watch For
California Attorney General Rob Bonta is gearing up to lead multiple states in a potential lawsuit challenging the merger, according to multiple outlets, with Bonta’s office telling the Los Angeles Times, “The Paramount acquisition of Warner Brothers remains an active investigation, and we do not have any updates to share at this time.” Paramount said earlier this week it would “fight against any attempt to derail a deal that plainly benefits consumers, creators, and the industry as a whole.”
Key Background
Paramount became the lead suitor for Warner Bros. after Netflix refused to match an offer it made in February. Netflix, which only sought to acquire Warner Bros. studio and streaming businesses, said the merger “was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.” The Paramount-Warner Bros. merger is heavily bankrolled by billionaire and Oracle co-founder Larry Ellison, an ally of President Donald Trump who provided a $40 billion irrevocable personal guarantee to secure equity financing for the deal. Democratic lawmakers have accused Paramount leadership of appeasing the Trump administration by making multiple changes to its flagship news network, CBS News, in order to allegedly increase the odds of the Warner Bros. merger being approved. Paramount executives have dismissed the allegations.
Further Reading
Paramount Poised To Acquire Warner Bros. After Netflix Refuses To Match New Bid (Forbes)