David Ellison’s Paramount Skydance has reportedly cleared a big regulatory hurdle in advancing toward completing its $111 billion merger with Warner Bros. Discovery.
The Justice Department‘s Antitrust Division has approved the deal, as first reported by Politico. The agency is giving the green light to the Paramount-WBD tie-up without requiring “any divestitures, behavioral remedies or concessions,” according to the report.
After an extensive review, “DOJ officials determined the transaction did not pose a threat to competition and declined to challenge it,” Politico reported, citing anonymous sources.
Reps for Paramount and the DOJ did not immediately respond to requests for comment. The DOJ Antitrust Division approval of the Paramount-Warner Bros. pact is expected to be officially announced Friday.
There’s been major backlash in the industry to the megadeal, which would bring together Paramount assets including CBS, CBS News, Paramount Pictures and Paramount+ with WBD’s HBO and HBO Max, Warner Bros. Pictures, CNN, TNT, TBS, HGTV and more. Paramount execs have said they anticipate achieving more than $6 billion in cost savings through the merger — indicating big layoffs would ensue.
To date, more than 5,500 filmmakers, actors and other Hollywood professionals have signed an open letter opposing the deal, arguing that it would eliminate jobs, raise prices and reduce competition. Organisers of the BlockTheMerger.com open letter include the Writers Guild of America (WGA), while the Teamsters had urged the DOJ to block the Paramount-WBD deal unless Paramount agreed to “substantial and enforceable safeguards” against job cuts and committed to supporting increased U.S. production.
Paramount still faces other potential roadblocks to closing the WBD deal. Among those: State attorneys general including California’s Rob Bonta have said they will potentially move forward with litigation seeking to block the Paramount-WBD merger on antitrust grounds.
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Regarding the DOJ’s approval of the deal, Sen. Elizabeth Warren (D-Mass.) said in a statement, “This is terrible news for every American who doesn’t want Trump-aligned billionaires to control what they watch and how much they pay. The Paramount-Warner Bros. deal has reeked of corruption and influence-peddling. This fight isn’t over. State AGs must block this merger.”
Meanwhile, Paramount’s proposed WBD deal is undergoing regulatory review in Europe and the U.K.
The European Commission is investigating the deal under the EU’s Foreign Subsidies Regulation, looking at the approximately $24 billion being fronted for the takeover by the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi. The EU set a provisional July 14 deadline for vetting the deal under the law, according to a notice posted on the regulatory agency’s site. That’s in addition to its investigation under standard merger rules with a July 7 deadline.
On Tuesday (June 9), the U.K.’s competition regulator, the Competition and Markets Authority, said it initiated an investigation into the proposed Paramount-WBD deal.
From Variety US