Paramount-Warner Merger Halted After US State Governments File Lawsuits

Merger Halted for Up to 10 Months
Financial Strain and Risk of Deal Collapse

Lawsuits filed by state governments in California, New York, and elsewhere have forced a halt to the mega-merger process between two giants of the global film and media industry: Paramount Skydance (Paramount) and Warner Bros. Discovery.

Paramount. Reuters=Yonhap News

According to Reuters and other outlets on July 24 (local time), Paramount stated in court filings that it has agreed to suspend merger proceedings with Warner Bros. Discovery until June 1st of next year or five days after a federal court ruling, whichever comes first.

The merger process will resume at the earlier of either five days after the court’s decision or June 1st of next year.

Paramount had planned to complete the merger by September this year and had already received approval from the U.S. Department of Justice and the European Union (EU).

However, as 12 state governments—including California and New York—filed lawsuits against Paramount alleging violations of antitrust laws, the merger has been put on hold.

The U.S. District Court for the Northern District of California ordered a roughly two-week suspension of the merger process until August 3rd and announced that it would decide in a separate injunction hearing whether to extend the suspension further.

Paramount stated, "A trial based on evidence can now proceed immediately," emphasizing that, "This is the quickest way to demonstrate that our merger deal is beneficial for everyone."

Paramount had previously committed to pay a delay compensation fee of 25 cents per share each day the merger process is delayed after September 30th in its acquisition of Warner Bros. Discovery. Under this commitment, the company would be required to spend 7 million dollars (about 10.3 billion KRW) daily from the third quarter of this year onward.

The risk of the deal falling through has also increased. Paramount must complete the transaction by June 4th of next year, and if it fails to do so and the deal collapses, it must pay Warner Bros. Discovery an additional 7 billion dollars.

This content was produced with the assistance of AI translation services.