Paramount Secures Conditional EU Nod for $110B Warner Bros. Takeover Amid US Antitrust Suit

Paramount Skydance Corp. has received conditional antitrust approval from the European Union for its proposed $110 billion acquisition of Warner Bros. Discovery Inc. The green light from Brussels marks a significant step forward for the media megadeal, even as it confronts a substantial legal challenge in the United States.

European Concessions

The European Commission's approval, announced Wednesday, is contingent on several key commitments from Paramount aimed at preserving competition in the European film distribution market. According to the EU's competition regulators, these remedies "fully address the competition concerns identified by the commission."

Paramount has agreed to the following conditions:

• Terminate its existing European distribution agreement with Universal Pictures within 13 months of the deal's closing.
• Divest its stake in United International Pictures, a European film distribution joint venture.
• Refrain from entering into any new film distribution agreement with Universal in Europe for a period of 10 years.
• Not transfer the distribution of Warner's films to its own theatrical distributor.

US Legal Battle Looms

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While the deal has cleared a major hurdle in Europe, its fate in the U.S. remains uncertain. On July 13, California and 11 other states filed a lawsuit to block the merger, arguing that the combination of two of Hollywood's five largest studios would substantially harm competition in the film and cable television industries.

A U.S. federal judge has temporarily paused the transaction for 14 days, disrupting the companies' plans to close the deal this week. The delay carries significant financial risk; if the acquisition does not close by the end of September, Paramount is required to pay late fees to Warner Bros. shareholders amounting to approximately $7 million per day.

Market Reaction

Following the EU's announcement, shares of Paramount Skydance Corp. traded 2.5% higher, suggesting investor optimism about the development. In contrast, shares of Warner Bros. Discovery remained relatively flat, reflecting the ongoing uncertainty posed by the U.S. lawsuit. Paramount, led by CEO David Ellison, agreed to acquire Warner Bros. in February after a bidding war with Netflix Inc.