EU set to clear Paramount’s $111bn takeover of Warner Bros
David Ellison’s media group is discussing remedies with Brussels in order to clear key regulatory hurdle
Brussels is set to approve Paramount’s $111bn takeover of Warner Bros Discovery provided the company accepts certain remedies, in a move that would clear the way for a deal to create one of the world’s largest media and entertainment groups.
The deal, agreed in February after a months-long bidding battle with Netflix, will combine some of the industry’s most valuable assets under one roof, including HBO, CNN, CBS News, Paramount Pictures and Warner Bros studios.
The exact remedies are still being worked out between the companies and the European Commission, the bloc’s antitrust enforcer, after they met on Tuesday, according to two people involved in the discussions.
The people added that the remedies could include a requirement for Paramount to exit its joint venture with Universal Pictures, which distributes films in several international markets. They cautioned that a final decision had yet to be taken.
The Commission’s review is among the last major regulatory obstacles facing David Ellison, the billionaire son of Oracle founder Larry Ellison, whose Paramount Skydance is seeking to create one of the world’s largest media and entertainment groups.
The deal gained approval from the US Department of Justice this month.
The Commission has a July 7 deadline to either approve the deal or open an in-depth investigation. The transaction is also being reviewed under the bloc’s foreign subsidies regulations, which are designed to prevent state-backed financial support from distorting competition in the EU.
Paramount’s offer is backed by financing from Saudi Arabia’s Public Investment Fund and L’Imad, an investment vehicle backed by Abu Dhabi’s sovereign wealth fund.
The EU’s competition chief Teresa Ribera on Wednesday told Bloomberg TV that the bloc was looking to determine “to what extent there is a reduction of the capability of creators to reach their audiences in the context of this deal”.
The combined company is betting that greater scale will help it compete in an increasingly fragmented media market upended by deep-pocketed technology groups and streaming rivals.
A spokesperson for Paramount said the company does not comment on ongoing regulatory proceedings. A spokesperson for the Commission declined to comment.