Paramount's Acquisition of Warner Bros. Faces EU Scrutiny Over Middle Eastern Funding Sources
Alina Collins
Paramount Skydance's $110 billion bid for Warner Bros. Discovery has been formally notified to the EU, triggering a foreign-subsidy probe into $24 billion in Middle Eastern financing — July 14 will determine whether Hollywood's biggest-ever deal clears the final hurdle.
How big is this deal?
Paramount Skydance is offering $110 billion for Warner Bros. Discovery. The deal was formally notified to EU competition regulators on June 9.
If approved, the Ellison family would control a media empire spanning Hollywood franchises (*Harry Potter*, *Mission: Impossible*, *Casablanca*), news outlets (CNN, CBS), and streaming (HBO).
This means → it is not just a studio acquisition — it is a news + entertainment + streaming three-way merger, large enough to reshape the entire industry.
Why is the EU probing Middle Eastern money?
The Middle Eastern backers providing $24 billion include Saudi Arabia's Public Investment Fund (PIF), Qatar Investment Authority (QIA), and the lesser-known Abu Dhabi firm L'imad Holding Co.
The EU's Foreign Subsidies Regulation (FSR) — a law designed to check whether non-EU government money distorts competition inside Europe — requires a dedicated probe whenever large deals involve state-linked foreign capital.
In plain terms = the EU's concern is not the dollar amount — it is whether the governments behind these sovereign funds are effectively subsidizing the buyer, giving it an unfair competitive edge.
Who else is financing the deal?
Apollo Global Management and other institutions are providing up to $54 billion in additional financing.
Abu Dhabi's Mubadala Investment Company has a long-standing partnership with Apollo, and PIF's venture arm holds stakes in Apollo-managed funds.
This reflects a reality regulators cannot ignore: Middle Eastern sovereign capital and Wall Street private equity are now deeply intertwined — the EU's scrutiny extends well beyond the headline $24 billion.
Has the EU used this tool before?
In late May, JD.com's bid for German consumer-electronics retailer Ceconomy became the first Chinese-led deal to face a full FSR review.
Before that, Abu Dhabi's national oil company ADNOC won conditional approval for its €11.7 billion acquisition of German chemicals group Covestro — but only after an in-depth investigation.
This means → the EU is already actively wielding this instrument — both Middle Eastern sovereign funds and Chinese state capital have been measured by it, and Paramount's deal will be no exception.
Why does July 14 matter?
The European Commission has set July 14 as its deadline to decide whether to escalate the subsidy probe into a full in-depth review.
If regulators determine the financing risks distorting competition, they can fine the companies involved, suspend bidding rights, or block the acquisition outright.
In plain terms = July 14 is the pass-or-fail watershed: a light outcome means conditional clearance; a heavy one means the deal stalls — this is one of the last regulatory gates David Ellison must clear after fending off multiple rounds of competing bids from Netflix.
Content is for reference only, not financial advice.