EU Antitrust Regulators Approve Paramount Acquisition Of Warner Bros. Discovery

European Union (EU) regulators have approved Paramount’s $110 billion acquisition of Warner Bros. Discovery, a major step for the merger, which has been facing challenges in the U.S.

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The European Commission — the executive cabinet of the EU — announced Tuesday that the “proposed acquisition” of Paramount by Warner Bros. is approved, “conditional upon full compliance with the commitments offered by Paramount.”

The Commission reviewed the merger from multiple perspectives, ruling that “at film production level, enough film studios remain as competitors.” However, “at film distribution level, the Commission found that as a result of the transaction, there will be high concentration and increased transparency.” The European Commission ruled that, because both companies would use United International Pictures (UIP) as their distribution system, “it would have led to worse rental and distribution terms for cinema operators, ultimately disadvantaging consumers.” All its determinations only apply to the European Economic Area (EEA). (RELATED: EU Finalizes US Trade Deal Ahead Of Trump’s July 4 Deadline)

To address the European Commission’s concerns, Paramount has committed to “Termination of [its] stake in UIP in the EEA within 13 months from the closing of the transaction.” Paramount also proposed limits on its ability to enter into agreements with UIP or any other distributors in the EEA for the next 10 years, to keep competition in the distribution market.

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Still, the merger is currently facing major hurdles in the U.S. A federal judge temporarily blocked the “megamerger” on Monday, allowing for a 14-day restraining order on the acquisition. The order comes after 12 state attorneys general filed a lawsuit against the merger on July 13.

The U.S. said that the lawsuit “present[s] compelling evidence that the combined firm resulting from the transaction will possess substantial market share in the wide-release theatrical distribution market.”

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