Paramount Skydance Corp is prepared to sell its film distribution joint venture with Universal Pictures as part of efforts to overcome antitrust concerns raised by European Union regulators about its proposed $110 billion takeover of Warner Bros Discovery, a person familiar with the matter said on Wednesday.
The proposed divestiture follows a meeting between Paramount and the European Union’s competition enforcers on Tuesday and is due to be formally submitted next Tuesday, the person said. The submission would push back the European Commission’s preliminary review deadline - originally July 7 - by 10 working days, moving it to July 21.
Earlier reporting in February indicated the transaction was expected to clear EU scrutiny without major concessions, with Paramount reportedly willing to sell smaller channels, including its children’s brands, if necessary. The source cited for that reporting said those particular channel-sale options are no longer being considered because no concerns were raised on that front.
Shifting the remedy focus to the film distribution joint venture could be aimed at addressing reservations voiced by European cinema operators about how the combined company might affect distribution dynamics. A Paramount spokesperson declined to comment on ongoing regulatory proceedings.
In parallel with the antitrust review, the acquisition is being examined under the European Union’s Foreign Subsidies Regulation. That separate process is examining financial support for the bid from several sovereign and state-linked investors: Saudi Arabia’s Public Investment Fund, Abu Dhabi’s L’imad Holding Company and the Qatar Investment Authority. Paramount is expected to obtain unconditional approval in that review, according to the same person.
Across the Atlantic, the U.S. Justice Department last week cleared the acquisition, concluding it was unlikely to harm competition or consumers. Nonetheless, California, New York and other U.S. states are preparing a lawsuit to block the deal, sources familiar with the matter have said, meaning legal and regulatory hurdles remain on multiple fronts.
Contextual note - The proposed divestiture and staggered regulatory timelines underscore the multiple parallel reviews large media mergers can trigger across jurisdictions, encompassing competition assessments and scrutiny of foreign financing.