Paramount is close to completing its $111 billion acquisition of Warner Bros., a deal that will transform the studio into a theatrical and news giant.
The European Commission is expected to approve the merger before the next deadline to open an in-depth investigation Financial Times Wednesday. The green light will include a condition designed to address competition concerns in film distribution in international markets that would require Paramount to exit its joint venture with Universal Pictures, according to two sources familiar with the situation mentioned in the story. The final decision has not been made.
The approval comes on the heels of competition cops in China and South Africa approving the merger, according to securities documents filed on Monday and June 17.
“We have engaged with all regulatory and law enforcement agencies in a constructive and transparent manner and will continue to do so,” a Paramount spokesperson said in a statement.
So far, antitrust authorities in Saudi Arabia, Ukraine, Serbia and North Macedonia have found that the deal does not violate antitrust laws. Regulators that examine foreign investments from Gulf sovereign wealth funds in Germany, Italy, France, Romania, Slovenia, Belgium, Czechia, New Zealand, and most recently Spain have also agreed.
Paramount has framed the deal as one that would boost competition in Hollywood, arguing that it is necessary to compete against tech giants like Netflix, Amazon and Apple.
“While we work constructively around the world, regulators understand the competitive strength of this deal and that delaying approval means the tech monopolies win and consumers, talent and workers lose,” Makan Delrahim, Paramount’s chief legal officer, said last week.
The Justice Department eventually agreed with the studio’s position on the merger when it signed the deal earlier this month. “In technology-driven industries, the disruptors of the recent past may become the entrenched monopolies of today,” the report said. “With this historical experience and current enforcement sensitivity to competition in dynamic markets, the Department conducted a comprehensive investigation into the proposed transaction to assess whether the proposed transaction posed any harm to competition.”
One of the agency’s key findings is that the acquisition “will increase competition across the media and entertainment ecosystem,” the Justice Department’s Antitrust Division said in the announcement. The agency found that the markets for streaming, linear television and developing, producing or distributing films for theatrical release would not be harmed, concluding that no divestitures, behavioral remedies or waivers were necessary.
The green light and lack of concessions have amplified speculation that President Trump has his thumb on the scale of David Ellison’s plans to assemble a media conglomerate. His father, Oracle scion Larry Ellison, has tapped into his close friendship with Trump to help in the effort.
According to a report from The Wall Street Journal On Wednesday, Larry Ellison gave nearly $45 million to a political nonprofit group that supports Trump’s election in 2024. More recently, he gave millions more dollars to groups that support Trump.
Completing the merger will reshape Hollywood, with Paramount becoming the nation’s largest theatrical distributor and media giant.
However, a coalition of states led by California is waiting in the wings to challenge the deal. A source familiar with the situation said that a lawsuit, to be joined by New York, Colorado, Oregon, Nevada, Washington, Connecticut and Tennessee, aimed at blocking the merger, is expected to be filed within a month. Hollywood Reporter.
