Paramount and WBD pause merger after legal challenges

Earlier this month, 12 US states filed a suit arguing that the deal would harm competition and lead to higher prices for consumers.

The decision comes just days after European regulators approved the deal, on the condition that Paramount withdraw from its film distribution partnership with Universal Pictures.

In a court filing, Paramount said that it has agreed not to complete the merger until an antitrust trial takes place, or until June 1, 2027, whichever comes first. For comparison, Paramount’s original plan was to take control of Warner by the end of September 2026.

Analysts have called the delay a major setback for the studios. The delay is also potentially costly for Paramount. Under the terms of the merger agreement, the company will begin owing Warner Bros Discovery shareholders a 25-cent-per-share 'ticking fee' each quarter the transaction remains incomplete after 30 September 2026.

"Our argument against this illegal merger is straightforward: When too few corporations have too much power in markets central to American life, it makes things more expensive, and it makes things worse," California Attorney General Rob Bonta said in a statement. "We are eager to continue to make our case in court and celebrate another tremendous win in our effort to ensure this unlawful merger never sees the light of day."

A Warner-Paramount merger would bring together two of the five last legacy studios in Hollywood, streaming operations HBO Max and Paramount+, as well as a string of TV networks and news operations.

The European Commission has approved Paramount Skydance’s proposed $110bn acquisition of Warner Bros. Discovery. Discover more here.