The European Union approved Paramount's proposed takeover of Warner Bros. Discovery, giving conditional clearance to one of the largest media transactions under review and removing a major international obstacle for the companies.
The European Commission, acting as the bloc's antitrust authority, concluded that the combination would still leave sufficient competition in areas such as film production and streaming. Its main concern centered on theatrical film distribution, where the regulator warned that a more concentrated market could worsen rental and distribution terms for cinema operators and, ultimately, consumers.
To address those concerns, Skydance-owned Paramount committed to end its European Economic Area stake in United International Pictures, the long-running film distribution venture with Universal. The company must exit that partnership within 13 months after closing the Warner acquisition and must not enter new agreements with Universal in the region for 10 years.
The clearance also requires the current distribution of Warner films in the affected European countries to move into the same pipeline Paramount is using there. The Commission said its approval depends on those commitments and that it will monitor their implementation.
Paramount welcomed the decision as a significant milestone toward closing the transaction. The company has argued that combining Paramount and Warner would increase scale, strengthen competition against large technology companies and bring assets such as HBO Max, Warner Bros. studios, CNN, CBS, Paramount+ and major film franchises under one corporate structure.
The deal is still not free to close. In the United States, a federal judge ordered the companies to pause the transaction for at least two weeks after California and 11 other states sued to block it, arguing that the merger could reduce competition and consumer choice in Hollywood, theatrical exhibition and cable markets.
Paramount has rejected those claims and pointed to the European findings as support for its position that competition would remain. The case is set to remain halted at least until a preliminary injunction hearing scheduled for August 3.
The transaction has received additional clearances in countries including Australia, China and Canada, while other reviews remain open, including in the United Kingdom. Including debt, Paramount's proposed purchase of Warner is valued at nearly $111 billion based on current outstanding shares.
Timing has become a financial issue as well as a regulatory one. Paramount has pledged to begin paying Warner shareholders added ticking-fee compensation of about $7 million per day if the deal is not closed by September 30, keeping pressure on the companies as remaining reviews and litigation continue.
