EU Conditionally Approves Paramount's Acquisition of Warner; U.S. Lawsuits Still Pending
Claire Weston
The EU cleared Paramount Skydance's roughly $110 billion takeover of Warner Bros. Discovery with conditions, but a lawsuit by 12 U.S. states has frozen the closing — an August hearing will decide whether Hollywood's biggest-ever merger can land this year.
The EU said yes — what strings are attached?
The European Commission approved the deal Wednesday with three conditions: Paramount must exit its stake in United International Pictures in the EEA; it cannot co-distribute films with Universal in the EEA for 10 years; and it cannot shift Warner's theatrical distribution to Paramount's own distributor.
This means → the EU wants to prevent the merged giant from teaming up with Universal or Disney to dominate European screens.
In plain terms = Brussels said "merge if you like," but drew a line: no ganging up with other majors to control release schedules.
Federal regulators cleared it — so why are 12 states blocking?
The U.S. federal antitrust review closed in June; the DOJ raised no objections.
But on July 13, California and 11 other states sued, arguing the merger would reduce Hollywood's Big Five studios to four and harm competition in film and cable distribution.
This means → federal and state authorities split — Washington let it pass, but the states see a "five-to-four" consolidation as a competitive threat.
The deal is frozen — how has the market reacted?
A federal judge issued a 14-day temporary restraining order, blocking closing and upending the companies' plan to complete the merger this week.
Warner Bros. Discovery shares fell roughly 3.9% to $25.83 after the ruling, widening the gap to Paramount's $31-per-share offer to its highest since the deal was announced in February.
In plain terms = the wider that gap between the stock price and the offer price, the less the market believes this deal will close.
What does delay cost?
If the deal is not completed by late September, Paramount must pay Warner shareholders roughly $7 million per day in delay fees.
Prolonged delay could cost the acquirer billions of dollars.
This means → time itself has become a massive expense — every extra day adds another line to the buyer's bill.
What is the next milestone?
The court has set early August for the next hearing, where it will decide whether to issue a longer-term preliminary injunction.
If that injunction is granted, the deal could be shelved until a full trial — California has asked for a trial date in April 2027.
Separately, Bloomberg reports the UK government may launch a public-interest intervention over media-ownership plurality.
In plain terms = the August hearing is the watershed: if the judge says "stay frozen," this deal may not see a resolution until 2027.
Content is for reference only, not financial advice.