Paramount–Warner $163 Trillion Deal: Cleared by EU, But Blocked by 12 U.S. States

Will the Paramount-Warner $163 Trillion Mega Deal Come Together… Despite EU Approval, 12 U.S. States Signal Opposition

Divestment of stakes within 13 months after conditional approval raises the possibility of intervention by British regulators

The EU’s Tough Scrutiny: Clears the First Hurdle of the $163 Trillion Mega Deal

‘Paramount Sky Dance’ (hereafter Paramount) and ‘Warner Bros. Discovery’ have secured ‘conditional approval’ from the ‘European Union (EU)’ for a landmark merger-and-acquisition deal worth 163 trillion won. The titanic blockbuster deal that will shake up the global media landscape has cleared its first crest, but a final resolution is expected to be a long road fraught with obstacles, as ‘antitrust lawsuits’ in the United States and regulatory risk in the United Kingdom converge.

On the 22nd (local time), the ‘European Commission (EC)’ approved Paramount’s acquisition of Warner Bros. while setting down firm conditions. It demanded a full divestment of the stake in the ‘United International Pictures (UIP)’ joint venture that Paramount and Universal jointly set up within the European Economic Area (EEA). It also locked in a stringent bar that will prevent the two companies from entering into any direct or indirect contracts related to joint film distribution for the next 10 years.

The EC, however, decided that concerns about monopoly were low because powerful competitors such as Disney and Amazon MGM are entrenched in the film production segment. In response, Paramount formally announced its plan to fully wind down its relationship with the joint venture within 13 months from the time the acquisition and merger are completed.

A Counteroffensive From 12 U.S. States and Layered Regulatory Risk

Earlier, Paramount had reached a deal to bring Warner Bros. under its umbrella in a staggering amount of 110 billion dollars (about 163 trillion won), and it previously passed the U.S. Department of Justice antitrust review without issue last month. But the situation flipped abruptly after 12 states in the United States, led by California and New York, pulled out the sword of ‘lawsuits alleging violations of antitrust laws’. On the 20th, the court issued an order to halt all acquisition work for the next two weeks, delivering an immediate blow to the mega deal.

On top of that, the ‘U.K. regulators’ also hinted at potential involvement, keeping a close watch on the repercussions this merger could have on the domestic news and children’s TV markets, as well as the ‘online video service (OTT)’ ecosystem. As regulators in each country continue their tight, microscope-level scrutiny, observers expect the birth of the next global entertainment giant to walk through thick fog for the time being.