Warner Bros. and Paramount will join forces. There is consent from the Department of Justice
The Justice Department's Antitrust Division has approved Paramount Skydance's $111 billion bid, according to two people familiar with the matter. regarding the acquisition of Warner Bros. Discovery. This approval removes a major regulatory hurdle for the transactionwhich has become one of the most closely watched media merger cases of Donald Trump's presidency.
The decision paves the way for Paramount to merge with the entertainment and media company behind the major film and television studio, CNN and the HBO Max streaming service. The merger with Paramount+ will create a new offer that will boast approximately 200 million subscribers.
But a deal that would turn the Hollywood ecosystem upside down by combining two historically rival studios is meeting with… opposed by many representatives of the entertainment industry who fear, among other things, that it may lead to mass layoffs.
Details of the decision and discussions with Paramount
After a detailed analysis, representatives of the Department of Justice (DOJ) concluded that the transaction did not pose a threat to competition and decided not to raise any objections to it, said the people, who were granted anonymity in connection with the sensitive issues discussed. According to one of the people, the department approved the merger without requiring asset divestitures, conduct remedies or concessions.
The Justice Department did not immediately respond to a request for comment. Paramount also did not respond to a request for comment.
Three weeks ago, Paramount CEO David Ellison spent about two hours, according to one person familiar with the matter. at a personal meeting with officials of the Antitrust Division, including experienced lawyers. During the meeting, officials peppered Ellison with questions about the deal and its effects on competition until they felt they had covered all of their concerns, the person added. Ellison's father, Oracle co-founder Larry Ellison, is a longtime ally of President Donald Trump.
But that's not the end
The Justice Department's approval does not end legal scrutiny of the merger.
California Attorney General Rob Bonta is reviewing the deal and could still bring a lawsuit to block the deal, even though federal regulators have approved it.
A spokesman for U.S. Attorney Bonta's office told POLITICO earlier this week that “Paramount's acquisition of Warner Brothers remains the subject of an ongoing investigation.”
In a letter to Bonta last month, Paramount's chief legal officer, Makan Delrahim, urged California authorities not to question the deal, arguing that it is beneficial to competitionas it would create a stronger rival to Netflix while at the same time increasing the number of cinema releases and investment in film production.
Representatives from more than a dozen state attorneys general, including Bonta and New York State Attorney General Letitia James, attended the meeting between Ellison and Justice Department officials.
The approval of this transaction is the culmination of months of efforts by Paramount management, including Ellison, who met at least twice in person with antitrust lawyers and senior Justice Department officials.
Throughout those talks, Paramount has consistently maintained that the merger would enhance competition, not weaken it, creating a media company better equipped to compete with streaming market leaders and deep-pocketed technology rivals, according to people familiar with the matter.
Hollywood concerns
However, Hollywood employees fear that the merger may trigger another wave of layoffs in an industry that has been struggling for years. Critics say the promised billions of dollars in savings will come at the expense of jobs, fewer opportunities for creators and greater concentration of power in the film, television and streaming industries.
In March, Paramount Chief Operating Officer Andy Gordon told analysts the company expected more than $6 billion. synergies within three years of closing, most of which will come from non-employment sources.
The decision follows an increasingly fierce lobbying fight in Washington.
This week Paramount accused Netflix of waging a “scorched earth campaign” against its deal with Warner Bros. claiming that the streaming giant encouraged opposition from Teamsters and others in an attempt to torpedo the deal.
Netflix rejected the allegations, calling them “absurd.” The polemic underscored an extremely public and controversial fight over the merger as the Justice Department neared a decision.
