The U.S. Justice Department’s Antitrust Division has greenlit Paramount Skydance Corp’s proposed $110 billion acquisition of Warner Bros. Discovery.
Officials announced late Friday that the transaction poses no threat to competition across streaming, traditional television or the film industry.
This regulatory approval provides Paramount a crucial advantage as it seeks to fend off potential state-level challenges to the deal.
Separately, Paramount requested Federal Communications Commission (FCC) approval in April for foreign investments backing the acquisition. U.S. senators, however, have voiced concerns over the involvement of Middle Eastern sovereign wealth funds and Chinese firms. The FCC has yet to issue a decision.
Analysts had expected the DOJ not to challenge the deal because of Paramount’s political connections. Paramount CEO David Ellison’s father, billionaire Oracle co-founder Larry Ellison, has cultivated ties with President Donald Trump, and the company has hired former Trump officials.
Assistant Attorney General Omeed Assefi had said that politics would “absolutely not” drive the DOJ’s review of the transaction.
Paramount has argued the deal has no antitrust problems, and said the combined company would increase competitive pressure on Disney and Netflix.
However, several in Hollywood – including actors, directors, writers and producers – have expressed concern that the merger would result in fewer jobs and less diversity of storytelling.
California, New York and other U.S. states are preparing a lawsuit to block the deal, sources familiar with the matter told Reuters last week.
The lawsuit was expected to be filed in the coming weeks, the sources said. It was not immediately clear which other states would join the lawsuit, which would mark the boldest move yet by the states in their effort to be at the forefront of U.S. antitrust enforcement.
California Attorney General Rob Bonta criticized last week what he called President Donald Trump’s “abdication” of federal antitrust agencies with more resources than the state governments. Bonta, a Democrat, has led the charge among states concerned about the deal, promising a probe soon after Paramount announced it would acquire Warner Bros., following a bid by streaming giant Netflix.
