Paramount’s £80bn takeover of Warner Brothers moves closer after EU approval

Paramount Skydance's £80bn takeover of Warner Brothers has taken a significant step forward after receiving conditional approval from the European Union. The European Commission stated that Paramount's commitment to end a film distribution joint venture with Universal Pictures adequately addresses competition concerns.

Under the EU conditions, Paramount must withdraw from the joint venture within 13 months of closing the deal. Additionally, the company is prohibited from entering into any agreement with Universal to jointly distribute films in the European Economic Area for a period of ten years.

Paramount signed the deal in February after outbidding Netflix. If completed, the merged entity will control a vast portfolio of media assets, including CNN, Warner Brothers Pictures, TNT Sports, and the HBO Max streaming service.

Despite EU approval, the transaction faces tougher challenges in the United States. Last week, a US court ordered a pause on the deal following a lawsuit by a coalition of 12 states led by California, arguing the merger would irreparably harm competition. President Donald Trump has expressed interest in the deal's implications for CNN, a network he frequently criticizes.

A US hearing on a preliminary injunction is scheduled for August 3. If the merger is delayed beyond September 30, Paramount will be liable to pay Warner Brothers shareholders approximately £5 million per day. The Writers Guild of America has also sued, claiming the deal threatens writers' livelihoods and the health of the US entertainment industry.

The deal also faces potential intervention in the UK. Culture Secretary Lisa Nandy has indicated she is considering stepping in due to concerns over the impact on news, children's television, and streaming services.