European Union regulators on Wednesday approved Paramount’s $110 billion acquisition of Warner Bros. Discovery – delivering the mega media merger another greenlight even as it faces challenges at home.
The European Commission said the approval was conditional “upon full compliance with the commitments offered by Paramount,” after the David Ellison-led firm offered several concessions to get the deal rubber-stamped.
Paramount pledged to terminate its stake in United International Pictures, its film distribution venture with Universal Pictures, in the European Economic Area within 13 months of the deal’s closing, which is expected to finish this fall.
The tie-up also vowed not to enter any deal for 10 years with NBCUniversal, which owns Universal Pictures, to jointly co-distribute films throughout the same area, which includes EU member states and three other European countries.
In its decision, the EU said there are enough studios in the region to give it confidence the deal will not crush competition – adding its main concerns were film distribution, but those have been solved by Paramount’s agreements.
Meanwhile, while the deal has clinched regulatory approval from the Trump administration’s Department of Justice, it is still facing significant hurdles to closing.
On Monday, a federal judge slapped the acquisition with a temporary restraining order after a group of 12 Democratic state attorneys general, led by California, sued to block the deal on antitrust concerns.
US District Judge Araceli Martínez-Olguín of the Northern District of California, a Biden appointee, barred Paramount from closing the deal for 14 days and scheduled an Aug. 3 hearing for the states’ motion for a preliminary injunction.
Executives at Paramount and Warner Bros. had reportedly been expecting the judge to freeze the deal – but the real concern is getting the merger wrapped up by a critical September deadline.
If the deal is not completed by Oct. 1, a costly “ticking fee” kicks in, adding 25 cents per share to the cost of the acquisition for each quarter it is not completed – coming to a painful $7 million per day.
The deal would combine HBO Max, Paramount+, HBO, CBS, CNN and thousands of movie titles under one company, led by David Ellison, the son of Oracle billionaire and close Trump ally Larry Ellison.
Critics, including many in the film industry, like the SAG-AFTRA union, have argued the merger could reduce competition and raise prices for customers.
The states’ July 13 lawsuit noted the new conglomerate would control nearly one-third of the US theatrical film distribution market and almost one-third of the nation’s basic cable programming.
Paramount has repeatedly defended the merger and stuck by its initial goal to close by September.
Meanwhile, in the UK, Culture Secretary Lisa Nandy wrote to the companies in June warning that she is “minded to intervene” in the deal.
David and Larry Ellison are also facing a lawsuit from a Paramount shareholder alleging they cut a backdoor deal with President Trump to secure regulatory approvals.
The acquisition would give control of CNN to the Ellisons, after Trump has repeatedly railed against the network and accused it of being biased toward Dems.
CNN’s top anchors have reportedly grown panicked over the network’s future independence after David Ellison installed Bari Weiss to run CBS News following his acquisition of Paramount.