Warner Bros. $111 billion acquisition faces new delay

A federal US court has not yet approved the settlement between Paramount Skydance and a coalition of 12 states, which is supposed to remove the last major legal obstacle to the acquisition of Warner Bros. Discovery. The judge requested additional materials and did not set a date for a final ruling.

This is reported by Los Angeles Times and Variety. American publications estimate the scale of the Paramount and Warner Bros. Discovery deal at approximately $111 billion.

Paramount's settlement with attorneys general of California and 11 other states was reached earlier this week. It was intended to resolve an antitrust lawsuit that blocked the merger of the two media groups. However, the document will only take full effect after approval by a federal court.

At a hearing on September 24, US District Judge Araceli Martínez-Olguín stated that the court must not automatically approve the agreement between the parties and raised a number of questions about how much the proposed terms address the original antitrust claims.

The court also allowed third parties to submit their arguments regarding the agreement. Separately, Paramount and state representatives were instructed to respond to an appeal from Senator Cory Booker, who called for an independent assessment of the settlement from a public interest standpoint. Responses must be submitted by September 28.

The settlement itself includes, in particular, additional investments by Paramount in film production in the US, maintaining Paramount and Warner Bros. studio facilities in California, creating a fund for employees who may lose their jobs after the merger, as well as separate mechanisms to control editorial independence at CNN and CBS News.

For Paramount, the delay in the judicial review has financial implications. According to the Los Angeles Times, starting October 1, the company will have to increase payments to Warner Bros. Discovery shareholders by approximately $7 million for each day the deal remains incomplete.

Warner Bros. Discovery management previously expected to close the transaction by early October. Now this timeline depends on when the judge rules on the settlement.

Sources: Los Angeles Times, Variety