A group of state attorneys general led by California Attorney General Rob Bonta is expected to file a lawsuit as soon as Monday challenging Paramount Skydance's proposed acquisition of Warner Bros. Discovery, according to a CNBC report. The lawsuit will seek to block the merger on antitrust grounds. The deal would combine two major film studios, streaming platforms Paramount+ and HBO Max, and create the largest portfolio of TV networks in the U.S. by bringing together CBS, MTV, BET, CNN, and TNT under one entity.
Merger Wins Shareholder Approval and Sets September Close Target
The merger won approval from Warner Bros. Discovery shareholders in April. Paramount CEO David Ellison said in a recent earnings call that the deal was on track to close by September. Ellison has previously stated that the streaming services Paramount+ and HBO Max would become one following the merger. The transaction would also unite Paramount's broadcast network CBS and pay TV channels including MTV and BET with WBD's CNN, TNT, and other networks.
DOJ Clears Deal While EU Review Continues
In mid-June, the U.S. Department of Justice signed off on the tie-up, clearing it of federal antitrust concerns. The Division completed its analysis and determined that the transaction is not likely to result in harm to competition or American consumers. The merger has won approval from several global jurisdictions. However, the European Union is still reviewing the deal, with a new provisional deadline set for July 22. The European Commission said in a public filing this month that Paramount has submitted concessions to address concerns regarding the deal. The deal came under scrutiny from lawmakers in both the U.S. and Europe, including related to foreign funding that was part of Paramount's offer.
Ellison Commits to 30-Film Annual Slate Amid Industry Concerns
Hollywood has expressed concerns about the combination, citing the likelihood for fewer film releases and the potential for job losses in the industry. Ellison has promised that once combined, the film studios would put out a slate of 30 movies per year. He has said he is committed to protecting jobs in the industry.
Deal History: From Netflix Competition to $31-Per-Share Agreement
Ellison first set his sights on Warner Bros. Discovery last September. Just weeks after Paramount and Ellison's Skydance completed its merger, the company made its initial run for WBD, resulting in several bids and a formal sale process. WBD ultimately signed a deal to sell its film studio and streaming assets to Netflix. However, Paramount launched a hostile takeover offer and subsequently amended its bid. Netflix ditched its deal, and Paramount walked away with an agreement to buy the entirety of WBD for $31 per share.
FAQ
What is the expected timeline for the state attorneys general lawsuit against the Paramount-WBD merger?
A group of state attorneys general led by California Attorney General Rob Bonta is expected to file a lawsuit as soon as Monday challenging the merger on antitrust grounds.
When did the U.S. Department of Justice clear the Paramount-WBD merger?
The DOJ signed off on the deal in mid-June, determining that the transaction is not likely to result in harm to competition or American consumers.
What is the European Union's deadline for reviewing the Paramount-WBD merger?
The European Commission has set a new provisional deadline of July 22 for its review of the deal, and Paramount has submitted concessions to address regulatory concerns.
