EU greenlights Paramount's acquisition of Warner Bros. Discovery with conditions
The European Commission has approved Paramount's $111 billion purchase of Warner Bros. Discovery, requiring the company to end its film distribution partnership with Universal in Europe.
European regulators have given the go-ahead for Paramount's merger with Warner Bros. Discovery, but only on the condition that Paramount terminates its distribution relationship with Universal in the region.
The European Commission examined the merger's potential impact on film production, distribution, media licensing, and television broadcasting. It identified Paramount's joint distribution venture with Universal, called Universal International Pictures (UIP), as a major risk to fair competition. The Commission argued that adding Warner's film portfolio to UIP would lead to worse rental and distribution terms for cinema operators, ultimately harming consumers.
To secure approval, Paramount agreed to exit the UIP joint venture within 13 months of the deal's closing. Additionally, the company committed to not directly or indirectly co-distribute films with Universal for ten years.
The $111 billion merger has already been cleared by US federal authorities, but faces a legal challenge from twelve US states that have temporarily paused the deal. A judge imposed a two-week pause on July 20 and will hold a hearing on August 3 to decide if a full trial is necessary.
Outside the EU, UK regulators have signaled they may intervene. According to Bloomberg, if the deal is not completed by the end of September, Paramount must pay an additional $7 million per day until closing.
