The European Union approved Paramount’s $81 billion takeover of Warner Bros. Discovery this week, clearing another regulatory hurdle for the proposed merger, subject to conditions.
The European Commission, the bloc’s antitrust enforcer, said enough competitors would remain in markets including film production and streaming across the 27-nation European Union. But it said the combined company could gain too much concentration in movie distribution to theaters, potentially leading to “worse rental and distribution terms for cinema operators, ultimately disadvantaging consumers.”
To address that concern, the commission said Skydance-owned Paramount agreed to end its European Economic Area stake in United International Pictures, a joint venture with Universal used to distribute films in theaters outside North America. Paramount must exit that partnership within 13 months of closing the Warner acquisition and cannot enter new agreements with Universal for 10 years, the commission said.
The commission also said distribution of Warner films must be moved to Paramount’s existing pipeline in those European countries. It said approval depended on those commitments and that it would monitor implementation.
Paramount said the decision was “a major milestone” toward completing the acquisition. The company said the approvals showed a combined Paramount and Warner “will enhance consumer choice” and create a business with enough scale to compete with major technology companies.
The deal would combine assets including HBO Max, CNN, CBS, Paramount+, and film franchises such as “Harry Potter” and “Top Gun.” Paramount and Warner also own European television assets, including Warner’s TVN Group in Poland and Paramount channels such as MTV and Nickelodeon.
On Monday, a federal judge in the U.S. ordered the companies to pause the transaction for at least two weeks in a lawsuit brought by California and 11 other states seeking to block the deal. The states argued the merger would “extinguish competition” in Hollywood and reduce choices for U.S. consumers, especially moviegoers and cable customers.
Paramount called the states’ claims meritless and said the EU’s findings “directly refute key assumptions that underpin the state AGs’ complaint.” U.S. District Judge Araceli Martínez-Olguín set a preliminary injunction hearing for Aug. 3 and said the states had made a strong case that the merger could “substantially lessen competition” and would be “difficult, if not impossible, to unwind” without a pause.
President Donald Trump’s Justice Department said it would not block the deal. Paramount said it had also received regulatory clearances from Australia, China, and Canada, while reviews continued in the United Kingdom.
If the deal does not close by Sept. 30, Paramount said it will begin paying Warner shareholders about $7 million a day in added compensation. Including debt, the proposed acquisition is valued at nearly $111 billion.
