Paramount Skydance is poised to secure EU antitrust approval for its acquisition of Warner Bros Discovery, a move that is largely anticipated to face minimal regulatory hurdles. According to two sources familiar with the situation, the company is well-positioned to navigate the approval process, which could require only minor divestments to address any concerns.
In contrast to Netflix’s aborted bid, which encountered significant regulatory pushback, Paramount’s offering is said to present fewer complications. The combined market share of Paramount and Warner Bros remains below 20% across all European markets, a threshold that generally avoids the scrutiny of European Commission antitrust regulators, who tend to take issue when market share exceeds 30%.
Although Paramount has not yet formally submitted its request for EU approval, it is actively providing necessary information regarding its business operations. The anticipated approval process will also involve scrutiny under the EU’s foreign subsidies regulation due to the involvement of several state-backed investors, including Saudi Arabia’s Public Investment Fund, Abu Dhabi’s L’imad Holding Company, and the Qatar Investment Authority.
In a proactive move, Paramount has indicated a willingness to divest smaller channels, such as its children’s brands, should the EU require it to alleviate any overlapping business concerns. The melding of Paramount’s Nickelodeon and Warner Bros’ Cartoon Network is seen as a potential area of contention.
As the company gears up for formal approval, the timeline is expected to unfold over the coming months, starting with a 25-working-day preliminary review that could extend by an additional 10 days if any remedies are proposed. Paramount’s proactive approach in Europe also includes high-level meetings; CEO David Ellison’s recent discussions with French President Emmanuel Macron and Chief Legal Officer Makan Delrahim’s engagement with the European Commission’s merger official underscore the company’s commitment to a smooth approval process.
While the EU may seem to be a manageable hurdle, the U.S. and UK regulatory bodies are expected to present significant challenges. California’s regulatory landscape, in particular, could pose the most formidable obstacle to the deal’s completion.
European Parliament lawmaker Andreas Schwab, who has been vocal about regulatory concerns regarding tech mergers, has expressed a more favourable view of Paramount’s bid compared to Netflix’s. He believes that the acquisition does not threaten the emergence of a dominant digital player in the streaming market, stating, “I think Paramount is something we could accept. It is a concentration in the production of films.”
