The takeover of Warner Bros. Discovery, the owner of TVN, by Paramount Skydance may encounter a serious obstacle. According to reports by Reuters, a group of U.S. state attorneys general is preparing a lawsuit that could block the $110 billion transaction.
Will the takeover of Warner Bros. Discovery be blocked?
The agency reports that it is not yet clear which states will file the lawsuit, but California Attorney General Rob Bonta said in a Thursday interview that his office will soon decide whether to take action. Reuters notes that Warner Bros. shares fell by 1.8% following the news, while Paramount shares dropped by 4%.
The agency did not specify the legal basis for the anticipated complaint by state authorities, but the proposed deal has faced opposition from creative circles in Hollywood, which fear it could lead to mass job losses and a reduction in film and television production. The transaction also raises concerns about excessive consolidation in the streaming and film production markets, as well as potential political implications of the takeover of CNN by a company linked to the Ellison family, which is allied with Donald Trump. Among the television channels being acquired by Paramount is also Poland’s TVN.
Deal expected to close by July 15
Paramount Skydance is seeking to finalize the deal as quickly as possible, and according to the industry outlet Status, management hopes this will happen by July 15, although public statements and documents set the date at September 30. If the merger is not completed by then, WBD shareholders are to receive an additional $0.25 per share for each quarter of delay. Paramount Skydance has agreed to purchase WBD shares at $31 per share, with the total value of the deal estimated at $110 billion.
WBD shareholders approved the sale of the company during a special general meeting in April, but regulatory approvals are still required in the countries where both companies operate. The case is being reviewed, among others, by the UK antitrust authority Competition and Markets Authority. Paramount has also applied for approval from the European regulator.
The company is unlikely to face obstacles from the federal government. According to the outlet Semafor, citing sources familiar with the matter, the U.S. Department of Justice’s antitrust division is ready to approve the merger soon.