Settlement clears the way for Paramount-Warner Bros. merger
According to several reports released Monday, Paramount Skydance is preparing to resolve litigation with a coalition of state attorneys general who had gone to court to stop its $110 billion tie-up with Warner Bros. Discovery. The case, spearheaded by California Attorney General Rob Bonta, had been set for trial in March, which would have kept the transaction unresolved into mid-2027. Neither Paramount nor Bonta's office responded right away to media inquiries.[S1]
Combining Paramount and Warner Bros. Discovery would create a single company holding two legacy movie studios, a collection of television channels, the CBS broadcast network, and the streaming platforms Paramount+ and HBO Max. Regulators in the United States and abroad had already cleared the transaction, and Paramount had informed its investors that it aimed to finalize the deal by Sept. 30.[S1]
California, joined by 11 other states, sued in mid-July to halt the merger, pointing to antitrust worries in the film and pay TV markets. After that, Paramount consented to push the merger back to June 2027 so the litigation could run its course. That postponement would have been expensive for Paramount.[S1]
Under the terms of the merger agreement, Paramount accepted a ticking fee that would have begun accruing after Sept. 30, requiring an extra 25 cents per share each quarter to WBD shareholders until the deal was completed. That provision would have boosted the transaction's cash value by roughly $650 million every quarter. This story is developing.[S1]
