DOJ approves Paramount Skydance-Warner Bros. Discovery merger
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The Justice Department has approved Paramount Skydance's $110 billion takeover of Warner Bros. Discovery, as expected.
Why it matters: It's a major win for Paramount, which still awaits approval from regulators in Europe.
Zoom in: The deal was approved without any conditions, meaning Paramount will not be forced to divest any assets.
- The DOJ said that based on evidence from its investigation into the deal, it concluded that the merger "is not likely to result in harm to competition or American consumers," including with respect to streaming and linear television as well as studio development, production or distribution of films for theatrical release.
What they're saying: "We are grateful for the Department of Justice's thorough review of this transaction, as well as the work of the other agencies that have completed their reviews and provided clearance to date," Paramount said in a statement.
- "This deal is pro-competitive, resulting in a stronger company better positioned to compete against dominant technology platforms in an industry increasingly defined by intense competition for audiences, talent, technology, and investment," it said.
- "We remain focused on completing the transaction as soon as possible and delivering its benefits to consumers, creators, and the entertainment industry as a whole."
Yes, but: The transaction still faces regulatory headwinds.
- The U.K. Competition and Markets Authority said earlier this week it will formally launch an investigation into Paramount's takeover of WBD.
- It has until Aug. 7 to announce whether it will refer the merger for the second phase of an investigation.
- Last week, Bloomberg reported that Paramount is open to selling some of its children's TV network assets to help win EU regulatory approval.
Zoom out: Back home, state attorneys general from California and New York are reportedly part of a group that is preparing a lawsuit to block the deal.
- California Attorney General Rob Bonta has already said that the state's Department of Justice has an opened investigation into the deal and that "we intend to be vigorous in our review."
- Paramount has said that it does not believe any aspect of the transaction raises competition.
- "To the contrary, this is a pro-competitive transaction that will create a stronger competitor with the scale, flexibility and resources needed to compete more effectively for audiences, premium content and creative talent," it said in a statement in response to the states' probe.
The intrigue: In its statement announcing its federal regulatory approval, the Justice Department noted there were state attorney general offices that participated in its investigation "by virtue of the Parties' voluntary waivers of confidentiality, which allowed the Division and States to share information with each other and for the States to attend and participate in the Division's depositions."
