Federal judge blocks Paramount's $110 billion Warner Bros. Discovery deal through August 3

RegulationM&A · Partnership Impact 4

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A federal judge in Oakland has barred Paramount Skydance from closing its $110 billion purchase of Warner Bros. Discovery through August 3, after a coalition of states led by California argued the combination would unlawfully decrease competition in film and television. Judge Araceli Martínez-Olguín found the states made a strong showing that the deal would harm competition, accepting their claim that the combined company would control 27% of the market for distributing widely released films. The ruling freezes the transaction pending an August 3 hearing on a preliminary injunction, which could delay closing for months and trigger a ticking fee of roughly $7 million per day past September 30. Warner Bros. Discovery shares fell as much as 4% following the decision, widening the merger arbitrage spread to about 17% against the contracted $31 per share cash payout. The European Commission faces a July 22 deadline on Paramount's proposed remedies, while Britain's culture secretary has indicated she may intervene in what she called an unprecedented union.