Paramount Skydance has secured all regulatory clearances required under its merger agreement to acquire Warner Bros. Discovery after an eight-month review spanning 68 countries, with litigation brought by 12 U.S. state attorneys general as the only remaining obstacle, the company said.
The regulatory review has included authorities in the European Union, U.K., Australia, Canada, Brazil, China, COMESA and the U.S.
Mexico became the latest jurisdiction to grant clearance.
The U.S. Department of Justice has also completed its review.
Paramount said that absent the state litigation, it and Warner Bros. Discovery would be able to close the transaction and begin integration.
The company is urging the 12 state attorneys general, including California, to reach a settlement rather than proceed toward trial.
Paramount said it has offered commitments and concessions and remains willing to negotiate additional measures to address the states’ concerns.
The company argues that regulators worldwide have evaluated competition across theatrical film distribution, streaming, television networks, and content production and determined that the transaction does not warrant being blocked.
State attorneys general have reached a different conclusion and continue to challenge the deal.
Paramount highlighted several regulatory findings in making its case.
The U.K. Competition and Markets Authority determined that the transaction did not create a realistic prospect of a substantial lessening of competition.
In television, Paramount cited findings from the European Commission and U.S. Department of Justice recognizing competitive pressure from streaming services on traditional linear and broadcast networks.
The company also pointed to approvals involving theatrical distribution.
The Australian Competition and Consumer Commission concluded that the combined company would continue to face competition from major studios including Disney, Sony, Universal and Amazon MGM, along with other providers.
Brazil’s CADE evaluated film distribution as a single relevant market rather than separating out a narrower category of top-grossing movies.
COMESA characterized theatrical film as a competitive and hit-driven market with numerous participants.
Paramount also said regulators found insufficient basis to conclude that the transaction would reduce film output or quality.
The company has committed to releasing at least 30 high-quality films annually across the combined organization.
Paramount argues that completing the Warner Bros. Discovery acquisition would create a stronger media competitor with more resources to invest in films, television programming, streaming, creative talent and employees.
At the same time, the company warned that continued litigation could create additional penalty fees, legal expenses and business disruption.
Paramount said it must consider those costs while protecting the combined organization’s longer-term financial position.
The company’s public position is that a negotiated settlement with the state attorneys general would provide a better outcome than taking the dispute to trial after more than eight months of regulatory review.
The transaction remains pending while that litigation continues.
KEY QUOTES:
“We are grateful that competition authorities in nearly 70 jurisdictions worldwide have independently and thoroughly reviewed this transaction and reached the same conclusion: it is pro-competitive, pro-consumer and pro-worker.”
“Despite this overwhelming global consensus, the litigation brought by the State of California and 11 other State AGs remains the final obstacle to completing a combination that will create a stronger competitor with greater capacity to invest in premium content, support creative talent and workers, and deliver more high-quality entertainment to audiences.”
David Ellison, CEO of Paramount
“While we remain confident that the law and the facts are on our side, we have offered commitments and concessions and remain open to working constructively with the State AGs to find a path forward in the interest of our employees and the creative community in California and across the world, just as we have with the regulators in 68 countries worldwide.”
David Ellison, CEO of Paramount
