Paramount-Warner Bros merger moves closer as US states settle antitrust lawsuit

Paramount Skydance's proposed $110 billion acquisition of Warner Bros. Discovery has moved closer to completion after the company reached a settlement with California and 11 other US states that had sued to block the merger on antitrust grounds.

The agreement removes a major legal obstacle to the transaction, which would combine two of Hollywood's largest film studios, streaming platforms Paramount+ and HBO Max, and television networks including CNN and CBS.

Read earlier e4m report on Paramount facing $30-mn penalty

The settlement, announced on Monday, remains subject to court approval. Paramount CEO David Ellison has reportedly indicated that the company is tentatively planning to close the transaction within approximately two weeks.

The settlement comes as Paramount races to complete the acquisition before a September 30 deadline, after which it would be required to pay Warner Bros. Discovery shareholders an additional $7 million for each day the transaction remains incomplete. The payment provision adds financial urgency to the deal's closure, with Paramount reportedly targeting completion in early October, subject to the remaining legal formalities. 

Read on Paramount Skydance moving to enforce bond requirement

Under the agreement, Paramount has committed to releasing at least 30 theatrical films annually during the first two years following the merger, increasing to 32 films annually over the subsequent three years.

The company will also invest an additional $1.5 billion in US film production over five years and establish an independent editorial oversight board for CNN and CBS.

For five years, Paramount and Warner Bros. will be required to negotiate distribution and carriage agreements for their respective basic cable channels independently, addressing concerns over the combined company's bargaining power with television distributors.

The merger would create a major global competitor in streaming, bringing together the content libraries, distribution networks and advertising businesses of both companies.

For advertisers, the combination could eventually reshape access to premium video inventory across streaming and traditional television, although the companies have yet to announce detailed plans for integrating their advertising operations.

The transaction comes as streaming platforms compete for advertising budgets, subscribers and premium content rights amid the continued shift in viewing from linear television to digital platforms.

In India, the merger could have implications for content licensing, streaming distribution and television advertising, given the two companies' existing presence in the market. Any changes to their Indian operations, including content partnerships and distribution arrangements, would depend on the combined company's post-merger strategy, which has not yet been detailed.