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Paramount has agreed not to close its acquisition of Warner Bros. Discovery is valued at $111 billion until a court decides whether the deal violates antitrust laws.
The studio, in a court document filed Friday alongside a coalition of countries seeking to block the merger, said it would delay completion of the acquisition until June 2027 or five days after the court issues a ruling in the case, whichever comes first.
A Paramount spokesperson said in a statement that the agreement provides a “direct path to prosecution based on the evidence.”
The spokesperson added: “This is the quickest and clearest way to demonstrate that this deal is good for competition, good for consumers, and good for innovators, a conclusion that dozens of competition authorities around the world have already reached.” “Plaintiffs’ market definitions are irrelevant to today’s market reality and cannot withstand scrutiny. We look forward to proving our case at trial.”
For Paramount, delaying the deal could be costly. Under the merger agreement, Warners shareholders are due approximately $650 million per quarter or $6.9 million per day if the deal is not completed by September 30.
The truce comes a day after U.S. District Judge Araceli Martinez Olguin issued an extension of a temporary restraining order preventing Paramount from closing until August 18 at the earliest.
The two sides are vying for an advantage in preliminary injunction proceedings. Paramount had asked the court to hold a three-day hearing next month, which the states opposed. The studio asserted that the states’ understanding and calculations of the markets in this case were flawed.
In a filing on Friday, the two sides agreed to cancel the preliminary injunction hearing on August 3. They will file a joint statement of their cases regarding setting a trial date by July 31.
The states alleged in their lawsuit that the takeover would significantly stifle competition in the higher-grossing broadband theatrical distribution and cable licensing in violation of antitrust laws. Separately, the Writers Guild of America claimed that the merger would result in lower compensation and worse deal terms.
