The U.S. Department of Justice (DOJ) has cleared Paramount Skydance’s massive $110-billion merger with Warner Bros. Discovery.
- Despite securing the federal green light, state attorneys general could challenge the deal.
- DOJ says the deal “is not likely” to hurt consumers or competition.
- PSKY CEO David Ellison has told investors that the merger is on track to be completed by September.
Paramount Skydance (PSKY) share price rose about 2% on Friday after federal regulators officially cleared its $110-billion acquisition of Warner Bros. Discovery.
The federal antitrust agency, in a statement Friday, said it won’t require any changes to the deal and that the transaction will not harm competition or American consumers.
“The Division has completed its analysis of the proposed merger of Paramount and Warner Bros. and determined based on the evidence received in its investigation that the transaction is not likely to result in harm to competition or American consumers,” the department said in its statement.
The decision marks a major milestone for Paramount CEO David Ellison, who aims to unite two iconic, century-old Hollywood studios under one roof. The combined entity will merge premium streaming platforms Paramount+ and HBO Max, major broadcast and cable channels including CBS and CNN, and the historic Warner Bros. film lot.
WBD stock gained about 0.5% on Friday.
PSKY’s Bidding War For WBD
Paramount launched its aggressive bidding war for Warner Bros. Discovery in late February, offering a higher valuation that disrupted an existing asset agreement between WBD and Netflix.
“We are grateful for the Department of Justice’s thorough review of this transaction,” Paramount said in a statement, calling the deal “pro-competitive” and framing it as a necessary step to square off against dominant global technology platforms.
Netflix walked away from its bid to acquire WBD earlier this year, in February, after PSKY raised its bid to $31 per share to buy the entirety of Warner Bros. Discovery. Netflix walked away terming Paramount’s deal to be superior.
State Prosecutors Could Still Challenge
Despite securing the federal green light, the megadeal is not entirely out of the woods. A coalition of state attorneys general—including California Attorney General Rob Bonta—is preparing an independent lawsuit to block the merger on antitrust grounds. Earlier this month, Bonta said he would soon decide on taking formal legal action to block the merger.
The timeline also remains tight for Paramount as it looks to close the transaction by September to avoid a costly “ticking fee” that kicks in after the deadline. The Australian Competition and Consumer Commission cleared the merger this week, but evaluations by European Union and United Kingdom regulators remain ongoing, with the EU setting a preliminary vetting deadline of July 14.
PSKY, WBD Retail View
Retail sentiment on Stocktwits was ‘extremely bullish’ with ‘extremely high’ message volumes for both stocks.
One user bet the deal to go through.
View this Stocktwits post
PSKY stock has lost 22.4% year-to-date, and WBD has lost 6.3%.
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