US Court Order Blocks Warner Acquisition by Paramount for Longer
The multibillion-dollar acquisition of Warner Bros. Discovery by Paramount faces further delays. A US court has extended the preliminary injunction until mid-August while examining a lawsuit brought by several states.
The planned takeover of media conglomerate Warner Bros. Discovery by Paramount is facing further delays. A federal judge extended the preliminary halt on the approximately $110 billion deal until August 17. During this period, the court intends to rule on a motion for a preliminary injunction filed by several US states.
Twelve states are seeking to permanently block the merger. They see a risk that Paramount and Warner together would gain too dominant a position in the film market, thereby disadvantaging competition and cinemas.
Regulators Reach Different Conclusions
In the judge's assessment, the plaintiffs have sufficiently substantiated these concerns for the time being, meaning enforcement of the takeover remains suspended for now. She therefore put the acquisition on hold on Monday — initially for two weeks. However, a court order has now extended that period by a further two weeks.
While the court proceedings are ongoing, competition authorities have assessed the deal differently. The US Department of Justice approved the acquisition without conditions. According to media reports, the leadership of the US Department of Justice approved the deal before the responsible legal experts had submitted their recommendation.
EU Commission Approved the Acquisition
The European Commission also gave its green light. It determined that, even following the acquisition, there would be sufficient competitors in the film production sector within the European Economic Area.
However, in the area of film distribution, the authority identified an excessive market concentration. It therefore made it a condition that Paramount divest its stake in film distribution company United International Pictures (UIP). UIP is a joint venture between Paramount and Universal that distributes films to cinema operators. Furthermore, the company would not be permitted to enter into any similar cooperation with Universal within the European Economic Area for the next ten years.
Politically Controversial as Well
The acquisition has also sparked debate for political reasons. Warner Bros. Discovery includes the news channel CNN. Critics fear that its editorial independence could suffer under the new owner.
Behind Paramount stands the family of software billionaire Larry Ellison, who is regarded as a supporter of US President Donald Trump. Trump has stated on multiple occasions that a change of ownership at CNN is important to him.
