A group of state attorneys general plans to file a legal challenge as early as Monday. paramount skydance acquisition proposal of warner bros discoveryreported CNBC’s David Faber.
Faber said the lawsuit, slated by a group including California Attorney General Rob Bonta, is expected to seek to block the merger on antitrust grounds.
The deal will bring together two major movie studios, Paramount and Warner Bros., and streaming platforms Paramount+ and HBO Max. Paramount CEO David Ellison previously said the deal would bring the streaming services together.
It also means combining Paramount’s broadcast network CBS and pay TV channels such as MTV and BET with WBD’s CNN, TNT and others to form the largest portfolio of television networks in the United States.
The merger was approved by WBD shareholders in April, and Ellison said in a recent earnings call that it is on track to close by September.
The deal came under intense scrutiny from both U.S. and European lawmakers, including in connection with the foreign funding that was part of Paramount’s proposal. In mid-June, the U.S. Department of Justice’s Antitrust Division signed a partnership, resolving the federal government’s concerns.
“The bureau has completed its analysis of the proposed merger of Paramount and Warner Bros. and, based on the evidence obtained in its investigation, has determined that the transaction is not likely to harm competition or U.S. consumers,” the department said in its decision.
The merger is on track for potential completion and has also received approval from several global jurisdictions.
However, the European Union is still considering the deal for approval, with a new interim deadline set for July 22nd. The European Commission said in a public filing this month that Paramount had made concessions to allay concerns about the deal.
Hollywood had previously expressed concerns about the merger, citing the potential for fewer movie releases and potential job losses in the industry. Mr. Ellison promised to release 30 films a year if the movie studios were combined and said he was committed to protecting jobs.
Ellison first set his sights on WBD last September. Just weeks after Paramount and Ellison’s Skydance completed their merger, the company made its first bid for WBD, resulting in several bids and a formal sale process.
WBD finally strikes a deal with movie studio to sell streaming assets Netflix. However, Paramount launched a hostile takeover offer and subsequently revised its bid. Netflix broke the deal and Paramount walked away with an agreement to buy all of WBD for $31 per share.
