EC set to approve Paramount’s $111bn Warner Bros Discovery takeover

WBD’s new Harry Potter TV series

The European Commission (EC) is set to approve the acquisition of Warner Bros Discovery by Paramount Skydance, in a deal valued at US$111bn, provided the company accepts a series of regulatory commitments that are still being negotiated with Brussels.

According to the Financial Times, both parties held talks this week with the EC to agree possible remedies that would clear one of the last major obstacles to complete the transaction.

The exact conditions the two will need to meet are still being worked out between the companies and the EC.

Citing two unnamed individuals involved in the talks, the FT said the remedies could include a requirement for Paramount to exit its joint venture with Universal Pictures, which distributes films in several international markets.

A final decision is yet to be taken. The EC has until July 7 to either approve the deal or open an in-depth investigation. The transaction is also being reviewed under the European Union’s foreign subsidies regulations, which are designed to prevent state-backed financial support from distorting competition in the EU.

Paramount Skydance’s offer is backed by financing from Saudi Arabia’s Public Investment Fund and L’Imad, an investment vehicle backed by Abu Dhabi’s sovereign wealth fund.

While the deal gained approval from the US Department of Justice this month, some US states, including California, have indicated they may attempt to sue on anti-competitive grounds to block the deal.

In the UK, antitrust watchdog the Competition and Markets Authority is launching an inquiry into the proposed merger.

The merged outfit will become one of the world’s largest media and entertainment groups, bringing together HBO, CNN, CBS News, Paramount Pictures and Warner Bros Pictures, as well as IP such as Game of Thrones, Harry Potter, Star Trek, Mission: Impossible, Looney Tunes and SpongeBob SquarePants.

A spokesperson for Paramount Skydance told the FT the company does not comment on ongoing regulatory proceedings and a representative for the EC declined to comment.