A federal judge issued a ruling on Monday instructing Paramount Skydance and Warner Bros. Discovery to pause their $81 billion US merger for a minimum of two weeks. This pause allows several states opposing the merger more time to pursue their case in court.
Led by California, twelve states filed a lawsuit last week to prevent Paramount’s acquisition of Warner, citing concerns that the merger would stifle competition in Hollywood and limit choices for consumers nationwide. The states urged the companies not to finalize the deal until the court could thoroughly assess their arguments. When the companies proceeded with the merger, the states sought a temporary restraining order, which was granted by District Judge Araceli Martínez-Olguín.
California Attorney General Rob Bonta hailed the court’s decision as a significant victory in their efforts to prevent the megamerger from moving forward. The potential combination of Warner and Paramount would unite two of the last five remaining legacy studios in Hollywood, bringing together various TV networks, popular titles like “Harry Potter,” and news outlets under one roof.
Paramount, acquired by Skydance last year, has vowed to vigorously defend its acquisition of Warner despite the legal challenges. The temporary restraining order suspends the merger for at least 14 days, with the possibility of extension up to 28 days. A hearing on the states’ request for a preliminary injunction is scheduled for August 3, with potential adjustments to the timeline.
The states argued that the proposed timeline for closing the deal favored Paramount and Warner, emphasizing that any financial risks incurred due to delays were a consequence of the companies’ decisions. The total value of Paramount’s acquisition of Warner, including debt, stands at nearly $111 billion US. Apart from California, other states joining the lawsuit against the merger include Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington, with additional opposition from the Writers Guild of America.
