Britain's Competition and Markets Authority (CMA) has entered the first phase of its review into Paramount Skydance's proposed $110 billion acquisition of Warner Bros Discovery (NASDAQ:WBD). The regulator completed the initial information-gathering step and on Tuesday formally began the phase-one assessment that will determine whether further scrutiny is required.
Under the CMA's process, phase one focuses on whether a transaction could substantially lessen competition in any UK market or region. The authority has set a deadline of August 7 to complete that assessment and either approve the proposal or refer it for a more detailed phase-two investigation.
The regulator previously ran an invitation to comment period from April 13 to April 27, during which stakeholders and other interested parties were able to submit views on how the acquisition might affect competition within the UK. Those responses will form part of the information the CMA weighs as it conducts its phase-one review.
The proposed deal followed an extended bidding contest earlier this year. Paramount outbid Netflix (NASDAQ:NFLX) in February for control of Warner Bros Discovery. If completed, the transaction would combine a range of studios and broadcast assets - cited explicitly as including CNN and CBS - under Paramount Skydance's ownership as it seeks a stronger footing against streaming competitors.
For the CMA, the inquiry centers on whether the consolidation of these content producers and networks would reduce choice or raise barriers for rivals in the UK market. The regulator's phase-one decision will determine whether the matter proceeds to a more comprehensive phase-two review, which would involve a detailed competition assessment.
At this stage, the CMA has not made a determination on the deal's competitive effects. The outcome of the phase-one review, due by August 7, will indicate whether the regulator sees sufficient grounds to open a full investigation.
Contextual note: Parties referenced in this report include Warner Bros Discovery and Netflix by their Nasdaq tickers WBD and NFLX. The bid by Paramount Skydance and the CMA's timetable are as stated.