EU approves Paramount Skydance's $111 billion acquisition of Warner Bros. Discovery

The European Commission on Wednesday approved Paramount Skydance's $111 billion acquisition of Warner Bros. Discovery, removing a major regulatory hurdle for the media mega-merger, according to multiple reports.

Approval came after Paramount agreed to exit its film distribution joint venture with Universal Pictures, United International Pictures, within 13 months of closing the deal. The studio also pledged not to enter any film distribution agreement with Universal in the European Economic Area for ten years, the commission said in a statement.

“These commitments fully address the competition concerns identified by the commission by ensuring that the films of the merged entity will not be distributed jointly with those of Universal or Disney.”

: European Commission statement

The commission's investigation found that while sufficient competition exists at the production level from rivals such as Disney, NBCUniversal, Sony and Amazon MGM, the deal would lead to high concentration and increased transparency in film distribution markets where Paramount already partners with Universal. Without the commitments, cinema operators would have faced worse rental and distribution terms, regulators said.

Paramount legal chief Makan Delrahim said in a statement that the combination does not pose competitive harms and instead enhances competition by creating a scaled media company capable of challenging dominant tech platforms. "By strengthening competition it will support increased investment in content, expand opportunities for creatives and deliver greater choice for consumers," he said.

US legal challenges remain

The EU greenlight comes as the deal faces ongoing legal opposition in the United States. A federal judge in California last week temporarily blocked Paramount from closing the transaction after a coalition of 12 states led by California argued the merger would harm competition. The court is scheduled to consider a preliminary injunction on August 3, which could prevent the deal from closing before a final decision.

Paramount is liable to pay Warner Bros. Discovery shareholders approximately £5 million ($6.4 million) for each day the merger is delayed past September 30, according to The Guardian. The deal has also been cleared by the U.S. Justice Department, reportedly over the objections of some staff reviewers.

In the UK, culture secretary Lisa Nandy said last month she was "minded to intervene" due to the potential impact on news, children's television and streaming services. The Writers Guild of America has also filed a lawsuit against the merger, alleging it would jeopardize writers' livelihoods.

Antitrust enforcers in more than a dozen countries have now cleared the deal, and regulators probing foreign investments from Gulf sovereign wealth funds in several European nations have also approved the merger, according to The Hollywood Reporter.