Paramount Skydance Corporation has secured regulatory approval in all jurisdictions required under its merger agreement to move forward with its proposed acquisition of Warner Bros. Discovery.
The latest approval from Mexico ends an eight-month regulatory review covering 68 jurisdictions, leaving a lawsuit filed by 12 US state attorneys general as the main remaining hurdle to completing the deal.
The review involved competition and investment authorities across the European Union, UK, Australia, Canada, Brazil, China, COMESA and the United States. The European Commission cleared the transaction in July, following approvals from regulators in several other markets.
Paramount CEO David Ellison said the broad regulatory approval showed that authorities had independently assessed the deal and found it unlikely to harm competition or consumers. He argued that the combined company would have greater capacity to invest in premium content, support creative workers and compete more effectively in the global entertainment market.
Paramount said the transaction could now move forward if not for the legal challenge brought by California and 11 other states. The company has called on the states to consider a settlement and said it remains open to commitments that could address their concerns.
The lawsuit comes despite the US Department of Justice closing its own investigation into the deal in June. After an eight-month review, the DOJ concluded that the acquisition was unlikely to significantly harm competition in areas including streaming, traditional television, film production or theatrical distribution.
Regulators in other major markets have reached similar conclusions. The UK regulator found that the merger was unlikely to significantly undermine competition across the affected markets.
The European Commission also found that streaming services would continue to put competitive pressure on the combined company’s television operations. In the US, regulators noted the growing competition streaming platforms are creating for traditional broadcast and linear television networks.
The proposed merger has also faced scrutiny over theatrical film distribution. Paramount said regulators in Australia, Brazil and the COMESA region found that the combined business would continue to compete with major studios and other independent players.
Paramount has rejected concerns that the acquisition would lead to fewer films or lower-quality content. The company has committed to releasing at least 30 high-quality films each year across the combined business and said regulators found it would remain commercially motivated to maintain its level of production.
Paramount said the regulatory approvals reflect a broad view that the acquisition is unlikely to significantly disrupt competition in the entertainment market.
For now, however, the deal remains subject to the US court case brought by the 12 state attorneys general. Paramount has warned that further delays could increase legal and transaction costs while creating operational uncertainty.
Ellison said the company is prepared to defend the acquisition in court but would prefer to reach an agreement that addresses concerns raised by the states while protecting employees, creative talent and consumers.
With regulatory clearance secured across 68 jurisdictions, attention now turns to the US legal challenge, the final major obstacle to Paramount’s proposed Warner Bros. Discovery acquisition.
