Paramount Skydance’s £۸۰bn takeover of Warner Brothers took a step closer to being realised after it won conditional approval from the European Union.
The European Commission said Paramount’s offer to end a film distribution joint venture with Universal Pictures addressed its concerns over the potential merger. As part of its commitments in the EU, Paramount has ۱۳ months from the date of closing the deal to pull out from the venture.
“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,” EU competition regulators said in a statement.
They also said Paramount should not directly or indirectly “enter into any agreement or understanding with Universal to jointly co-distribute films in the EEA” for a period of ۱۰ years.
Paramount signed the deal in February after beating Netflix in a bidding war.
If the deal goes ahead, the combined company would control a vast array of media assets including CNN, Warner Brothers Pictures, TNT Sports and the HBO Max streaming service.
Despite getting the green light in the EU, the transaction faces tougher challenges in the US. Last week Paramount Skydance was ordered by a US court to pause the deal, which has been cleared by the US Department of Justice, after a California-led coalition of ۱۲ states argued the merger would irreparably harm competition.
US president Donald Trump has made it clear he is interested in what the merger will mean for CNN, a broadcaster he is often critical of. Paramount CEO David Ellison is the son of Oracle co-founder Larry Ellison, a close ally of Trump.
There will be a US hearing on ۳ August regarding a preliminary injunction, which would prevent the transaction being closed before a final decision.
A prolonged interruption will cost the company financially, with Paramount liable to pay Warner Brothers shareholders about £۵m for each day the merger is delayed past ۳۰ September.
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The deal is also the target of a lawsuit by the Writers Guild of America, which said it would jeopardise writers’ livelihoods and threaten the health of US entertainment.
The deal faces another potential hurdle in the UK, which last month said it may intervene because of the potential impact on news, children’s television and streaming services.
“Following engagement with the parties and independent research, my department has today written to the current and proposed owners of Warner Bros Discovery on my behalf to inform them that I am minded to intervene,” said culture secretary Lisa Nandy, in a written ministerial statement.
