David Ellison’s Paramount has agreed to postpone the Warner Bros Discovery (WBD) merger in airy of antitrust lawsuits brought by US states and W
David Ellison’s Paramount has agreed to postpone the Warner Bros Discovery (WBD) merger in airy of antitrust lawsuits brought by US states and Writers Guild Of America.
In papers filed by the media company on Friday, Paramount agreed it would not close the $111bn transaction until five days after the cases are heard or June 1 2027, whichever occurs first.
There is still no trial date after a coalition of 12 states spearheaded by California secured a transient restraining order earlier this week blocking the merger for 28 days. They have alleged a merger will harm cable and theatrical competition.
The states’ preliminary injunction motion scheduled for August 3 has been cancelled and the WGA has withdrawn its motion. If required, both plaintiffs will be allowed to file motions for preliminary injunction orders at a later date.
At time of writing a “ticking fee” becomes payable by Paramount to WBD shareholders should the merger closes after September 30. The fee is understood to be equivalent to just under $7m a day. Were the entire transaction to fall apart, Paramount would owe WBD $7bn.
California attorney general Rob Bonta said on Friday afternoon: “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.”
Bonta continued, “Today’s agreement is great news for audiences, movie theatres, and the many people who write, build, and create the art, news, and entertainment so many of us enjoy. 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.”
The merger has been approved by the US Department of Justice and earlier this week the European Commission gave its approval on condition that Paramount breaks up its United International Pictures distribution joint venture with Universal Pictures.
A Paramount spokesperson said on Friday, “Today’s agreement is a significant win because the result is exactly what we have sought from the outset: a direct path to a trial based on the evidence. This is the fastest and clearest way to prove that this transaction is good for competition, good for consumers, and good for creators, a conclusion dozens of competition authorities around the world have already reached.
“Plaintiffs’ market definitions bear no relationship to the realities of today’s marketplace and cannot withstand scrutiny. We look forward to proving our case at trial.”
Shares in Paramount fell 3% in afternoon trading.
