RESOLVING THE LEDGER
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Britain's Competition and Markets Authority (CMA) has approved David Ellison-led Paramount Skydance's planned $111 billion takeover of Warner Bros. Discovery .
The merger watchdog, considering the merger on theatrical film distribution grounds, concluded although "the parties compete closely, they do not appear closer to each other than to Universal, Disney, or Sony. While the merged entity would become the UK's largest distributor, it would continue to face competition from these three major studios and a range of other smaller studios." Related Stories Business Warner Bros. Discovery Q2 Content Revenue Crashes on Rough Box Office Comps TV How Vicky McClure Became the Reigning Queen of the British Police Procedural
Paramount, as it passes another milestone to completion of its proposed merger, in a statement said it was "grateful to the CMA for its constructive engagement and its review of the transaction." The UK ruling also comes in the face of Paramount having won the bidding war for Warner Bros. Discovery after Netflix declined to raise its offer, but the merger is now on pause after Paramount was hit with several lawsuits.
That's including from 12 state attorneys general who claim the acquisition will kill competition in the film and television industries. The company has agreed to delay the big-money takeover of Warner Bros. Discovery until June 1, 2027, or until the antitrust lawsuits brought by state attorneys general are resolved.
In June, the CMA in Britain launched a formal review of the proposed megadeal and set itself a deadline of Aug. 7 for a ruling on the Hollywood combination of two major studios, two big news operations, streaming services and two portfolios of cable networks.
Paramount said it has entered into a deed of covenant and undertaking with the UK Department for Digital, Culture, Media and Sport after the CMA approved the megadeal on competition grounds. The proposed megadeal has received clearance in various territories but has attracted regulatory scrutiny across North America and Europe, with various industry players, ranging from competitors, writers, directors, actors and cinema operators, having expressed concerns about the impact that the merged powerhouse could have on the entertainment sector and consumers.
The coalition of 12 state attorneys general, led by California, sued Paramount on July 13 to stop its $111 billion takeover of Warner Bros. Discovery in a sweeping legal challenge amid the absence of the Trump administration's intervention in big deals. The states allege a violation of the Clayton Act, an antitrust law accounting for potential monopolies. They've asked Paramount not to close the deal until the case is decided. If not, they say they'll move for a temporary restraining order.
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