Twelve States Sue to Block Paramount’s $110 Billion Takeover of Warner Bros. Discovery

Overview

• The lawsuit, filed Monday by California with 11 partner states, asks a federal court to stop Paramount’s proposed $110 billion acquisition of Warner Bros. Discovery on antitrust grounds.
• State attorneys general say the combined company would control roughly 27% of theatrical distribution, about 30% of blockbuster distribution and about 27% of the basic cable market, which they say would harm cinemas and pay-TV customers.
• The U.S. Department of Justice cleared the deal in June, creating a split between federal and state enforcers that makes the court fight the main legal hurdle to closing.
• Paramount says the merger will cut about $6 billion in redundant costs and boost production to 30 films a year, but the company faces contractual quarterly delay payments of roughly $650 million to WBD shareholders if closing slips past the October deadline.
• The case raises practical risks beyond the U.S. suit because the European Union antitrust authority is still reviewing the transaction and industry groups including actors, writers and theater owners have publicly opposed the merger.