EU clears Paramount’s $110 billion Warner Bros deal as US battle looms

BRUSSELS: Paramount’s blockbuster takeover of Warner Bros. Discovery has cleared another major checkpoint in Europe, but the biggest hurdles are still playing out across the Atlantic.

The European Commission has approved Paramount Skydance Corp’s proposed $110 billion acquisition of Warner Bros. Discovery after the company agreed to unwind its European film distribution joint venture with Universal Pictures, according to Reuters.

The approval follows commitments by Paramount Skydance to terminate the United International Pictures joint venture in Europe within 13 months of completing the transaction.

As part of the agreement, the company also pledged not to enter into another film distribution arrangement with Universal in Europe for 10 years and agreed not to shift Warner Bros.’ theatrical distribution to its own European distribution network.

The European Commission said these commitments addressed concerns that the merged company could reduce competition in theatrical film distribution by combining the distribution of films from Paramount, Warner Bros., Universal and Disney.

“These commitments fully address the competition concerns identified by the Commission by ensuring that the films of the merged entity will not be distributed jointly with those of Universal or Disney,” the regulator said.

While the EU decision removes one regulatory obstacle, the transaction continues to face significant legal and political challenges elsewhere.

Last week, a US court ordered Paramount Skydance to temporarily pause the merger after a coalition of states led by California sought to block the transaction, arguing it would substantially reduce competition. The legal challenge comes despite the deal having already secured clearance from the U.S. Department of Justice.

The delay could also prove costly. According to Reuters, if the merger is not completed by 30 September, Paramount Skydance, chief executive officer, David Ellison could be required to pay Warner Bros. shareholders a “ticking fee” of 25 cents per share, amounting to roughly $7 million for every day the deal remains delayed.

The acquisition is also facing opposition from the Writers Guild of America, which has filed a lawsuit claiming the merger could threaten writers’ livelihoods and weaken the broader US entertainment industry.

Across the Atlantic, Britain is also reviewing the transaction. Last month, UK authorities indicated they could intervene over concerns about the impact on news services, children’s television and the streaming market.

If completed, the deal would reshape the global media landscape by combining Paramount’s film and television assets with Warner Bros. Discovery’s extensive portfolio of studios, streaming platforms and entertainment brands. For now, however, the companies must navigate a growing list of legal and regulatory challenges before the merger can become reality.