UK clears Paramount’s $110 billion Warner Bros acquisition

LONDON: Paramount’s blockbuster Warner Bros deal has cleared another major hurdle. The UK government and its competition watchdog have approved Paramount Skydance’s $110 billion acquisition of Warner Bros. Discovery after the companies offered a series of legally binding commitments on British broadcasting and content.

The decision removes a significant regulatory obstacle for the proposed takeover, leaving legal action by US states led by California as the main remaining hurdle to closing the transaction.

Paramount Skydance CEO David Ellison has committed to maintaining British content and the editorial independence of Channel 5 for at least five years.

Under the agreement, the combined company’s linear and on-demand services in Britain will retain distinct editorial identities for five years. The commitment also covers children’s channels including Nickelodeon and Cartoon Network.

Channel 5, which is owned by Paramount, will continue operating as a public service broadcaster until its current licence expires at the end of 2034. Its news operation will remain editorially separate from CNN International and CBS News.

The companies have also agreed to keep news archives from CNN, CBS and Channel 5 available to bona fide licensees on standard commercial terms.

The UK government had raised concerns about the potential impact of the deal on British broadcasting and content production. Media minister Lisa Nandy had said in June that she could intervene and potentially order a public-interest investigation.

The commitments offered by Paramount appear to have addressed those concerns. The combined company has agreed that the takeover will not reduce the number of people commissioning content in Britain or diminish the quality and range of programming commissioned.

The Competition and Markets Authority separately concluded that the transaction would not substantially lessen competition in three areas: movie distribution, children’s television channels and streaming services.

The twin decisions mean Paramount and Warner Bros can avoid a lengthy regulatory review in Britain, bringing the proposed combination a step closer to completion.

Paramount welcomed the CMA’s decision as an “important milestone” and said it was pleased to have agreed a path forward with the UK government.

The UK clearance comes after regulators in the US, China and other markets have already approved the transaction, but legal challenges in the US remain.

US states led by California have brought litigation seeking to halt the acquisition. A US judge also ordered Paramount to temporarily pause the Warner Bros acquisition in July, leaving the litigation as the principal remaining obstacle to the deal.

For Paramount, the UK approval removes one of the last major international question marks around its $110 billion bet on Warner Bros. Discovery. The focus now shifts back across the Atlantic, where the final battle over the media megadeal is set to play out.