EU clears $94bn Paramount-Warner deal on distribution terms
Brussels has conditionally approved Paramount’s $94 billion takeover of Warner Bros. Discovery, forcing the sale of its European distribution arm to prevent a near-monopoly in cinema markets.
The European Commission on Wednesday conditionally approved Paramount Skydance’s $110 billion (€94 billion) takeover of Warner Bros. Discovery, one of the largest media mergers in recent history. To secure regulatory clearance, Brussels mandated that the combined company terminate its stake in United International Pictures, a long-standing film distribution joint venture with Universal, across all 27 EU member states and the wider European Economic Area.
Regulators further imposed a strict 10-year prohibition preventing Paramount from directly or indirectly entering into any new joint film distribution agreements with Universal in the EEA. "These commitments fully address the competition concerns identified by the (European) Commission by ensuring that the films of the merged entity will not be distributed jointly with those of Universal or Disney," the EU said. "Under the supervision of the commission, an independent trustee will monitor their implementation."
This intervention underscores the outsized control that a handful of US conglomerates exert over how films reach European cinema screens. By dismantling the Paramount-Universal distribution partnership, Brussels is actively preventing a newly merged entity from leveraging a vastly expanded film library to squeeze theatre operators. On the production side, the commission concluded that the merger posed little risk, pointing to the continued competitive pressure from Disney, Amazon MGM, and various European film producers.
However, the European antitrust clearance does not guarantee the transaction will survive. Across the Atlantic, the deal faces severe legal turbulence after a federal judge in California ordered the companies to temporarily pause their merger this week. A crucial hearing on a preliminary injunction is scheduled for 3 August, which has the potential to block the transaction from closing entirely pending a final judicial ruling.
The proposed consolidation has already sparked significant opposition from industry voices who caution it will fundamentally reshape the entertainment landscape. If finalised, the merger would reduce the number of major US film studios to just four. Critics argue that this level of consolidation would inevitably trigger widespread job cuts, result in fewer films being produced and released, and ultimately reduce competition across the industry.
