British regulators on Thursday gave Paramount the greenlight for its $81 billion takeover of Warner Bros. Discovery, with some new assurances from the company — clearing another hurdle for the mega merger while it still faces challenges elsewhere.
The U.K.'s Competition and Markets Authority cleared the pending acquisition, ruling that a Paramount-Warner tie up does not pose a “substantial lessening of competition” in the country. Meanwhile, Britain's
Department for Digital, Culture, Media and Sport said it also wouldn't intervene — on the basis of several “legally-binding commitments” from Paramount related to its footprint in U.K. broadcasting and on-demand entertainment.
Paramount welcomed Thursday's decisions. The company, which was bought by Skydance just one year ago, called the U.K.'s clearance “an important milestone” towards completing its Warner purchase.
A Paramount-Warner combo would mean putting HBO Max, cult-favorite titles like “Harry Potter” and even CNN under the same roof with CBS, “Top Gun” and the Paramount+ streaming service. Both companies carry notable reach in production and television specific to the U.K., too — with assets also including Paramount-owned Channel 5 in London, localized Nickelodeon programming and Warner’s British arm of TNT Sports.
Citing competition concerns specifically for news, TV and streaming platforms available to U.K. consumers, Culture Secretary Lisa Nandy previously said she was “minded to intervene” in the merger. But on Thursday, her office said Paramount later agreed to “provide a set of protections” to safeguard the “continued availability of a diverse range of broadcasting and on-demand services in the UK,” as well their editorial independence.
DCMS said that includes maintaining independence at Channel 5, with an “entirely separate” editorial direction from CBS and CNN. Paramount also agreed to not combine its linear channels with on-demand services in the U.K., DCMS said, and that children's channels like Nickelodeon and Cartoon Network will remain distinct from each other.
Under their agreement, DCMS said it will monitor Paramount's implementation of these commitments and that the company will provide annual statements of compliance.
Critics of the Paramount-Warner merger have repeatedly asked regulators to challenge the deal. And just last month, Hollywood stars Alan Cumming, Benedict Cumberbatch and Benedict Wong published a joint op-ed in The Guardian calling on Nandy to intervene.
The merger “threatens to inflict immense harm on the British public,” the actors wrote on July 27. “As actors and public figures who have spent our careers in the arts in Britain — working with British crews, on British stages and sets — we have a responsibility to the public who support, enjoy and consume the art we make.”
While Paramount and Warner no longer face an imminent roadblock to their deal in the U.K., the companies have already agreed to delay closing their transaction well into next year as a challenge from 12 U.S. states makes its way through court.
Led by California, the coalition of states sued to block the deal last month — alleging that a Paramount-Warner combo would “extinguish competition” in Hollywood and lead to fewer choices for consumers, particularly U.S. moviegoers and cable customers. Groups like the Writers Guild of America have also filed suit.
The court has scheduled a 12-day antitrust trial to start in early March. Paramount has vowed to “vigorously defend” its transaction.
The companies argue that merging will be good for growth in the industry and give consumers access to more content. But critics have decried what further consolidation could mean in an industry already controlled by just a few major players — and in the U.S., questions of political influence have piled up around President Donald Trump’s close relationship with the billionaire family of Paramount CEO David Ellison.
In contrast to the states' case, the Trump administration’s U.S. Department of Justice announced in June that it also wouldn’t block the deal and instead released a lengthy statement in support of a Paramount-Warner combo. Meanwhile, Paramount has touted other regulatory clearances from the European Union, as well as countries like China, Canada and Australia.
Including billions in debt, Paramount’s proposed purchase of Warner is valued at nearly $111 billion (or over 82 billion English pounds) based on outstanding shares.
