Insiders have reported that the US Department of Justice has given the green light for Paramount Skydance’s $111 billion purchase of Warner Bros. Discovery.
This clearance marks a significant milestone for large media deals; however, Paramount may still encounter legal challenges from several state attorneys general, including California Democratic Rep. Rob Bonita, as noted by CNBC.
While the Justice Department’s Antitrust Division hasn’t issued an official announcement, news of this insider information caused a 4% rise in Paramount’s stock price last Friday.
According to Politiko, the acquisition was approved without any conditions or required changes.
Reports indicate that the Justice Department’s thorough investigation concluded that the deal wouldn’t harm competition, leading them to decide against any challenge.
In February, Paramount proposed a $31 per share offer to Warner Bros, sidestepping Netflix from the bidding.
Since that time, however, Paramount has accused Netflix of attempting to undermine their contract with Warner Bros through behind-the-scenes efforts.
Paramount’s chief legal officer, Makan Delrahim, stated in a letter dated June 5 that Netflix seems to be “poisoning the well” for regulators regarding the merger.
He remarked, “The aggressive response from Netflix indicates how seriously they view Paramount as a strong competitor.”
Despite these challenges, it seems Paramount is fully committed to seeing the acquisition through.
“We are grateful for the Justice Department’s extensive review and for the other agencies involved in this process. A stronger company will have a better chance to compete in the marketplace. We remain focused on finalizing the deal swiftly to benefit consumers and the entertainment sector,” stated Paramount Skydance in their Friday release.
However, Senator Elizabeth Warren from Massachusetts expressed her shock over the Justice Department’s approval.
Warren took to social media to criticize the decision, saying: “This is a terrible outcome for Americans who are against pro-Trump billionaires controlling entertainment choices. Paramount’s agreement with Warner Bros screams of corruption and influence grabbing.”
She added, “This struggle isn’t over. Legislation must intervene to block this merger.”
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