EU clears Paramount's £80bn Warner takeover as US delays threaten penalties

Paramount Skydance has moved a step closer to completing its £80bn acquisition of Warner Brothers after winning conditional approval from European Union regulators.

To satisfy the European Commission, Paramount committed to unwinding a film distribution joint venture with Universal Pictures within 13 months of the deal closing. Regulators also imposed a decade-long ban on the merged company entering into any co-distribution agreements with Universal in the European Economic Area.

“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,” EU competition regulators said. They further stipulated Paramount must not directly or indirectly “enter into any agreement or understanding with Universal to jointly co-distribute films in the EEA” for 10 years.

While the EU green light removes a major transatlantic hurdle, the transaction's fate rests on a fierce regulatory and political battle in the United States. Despite holding US Department of Justice clearance, the transaction was ordered paused last week by a US court.

A California-led coalition of 12 states argued the merger would irreparably harm competition, securing the judicial pause. The deal, signed in February after Paramount beat Netflix in a bidding war, would combine major assets including CNN, Warner Brothers Pictures, TNT Sports and HBO Max.

The transaction has also drawn political attention. US president Donald Trump has expressed interest in the deal's implications for CNN, a network he frequently criticises. Paramount CEO David Ellison is the son of Oracle co-founder Larry Ellison, a close Trump ally.

For investors, the US delays carry a steep and quantifiable price tag. Paramount faces a ticking financial clock, becoming liable to pay Warner Brothers shareholders roughly £5m for every day the merger extends past 30 September. A US hearing on a preliminary injunction, which would prevent the transaction closing before a final decision, is scheduled for 3 August.

The regulatory gauntlet extends beyond Washington. In the UK, Culture Secretary Lisa Nandy last month signaled potential intervention over the impact on news, children’s television and streaming services.

“Following engagement with the parties and independent research, my department has today written to the current and proposed owners of Warner Bros Discovery on my behalf to inform them that I am minded to intervene,” Nandy said.

Separately, the Writers Guild of America has filed a lawsuit arguing the consolidation would jeopardise writers’ livelihoods and threaten the broader health of US entertainment.