The Paramount-Warner merger is approved by Europe, but limitations are placed

The European Commission approved Paramount Skydance’s acquisition of Warner Bros. Discovery on Wednesday, as long as Paramount takes specific steps to prevent competition problems in the European Economic Area’s film distribution.

The Commission deemed the concerns of European authorities «fully» resolved after accepting Paramount’s June undertakings to remedy them. It came to the conclusion that the deal «would no longer raise competition concerns» once it was put into effect.

With the $110 billion acquisition, Paramount will gain control over properties like HBO and HBO Max, Warner Bros. film and television studios, DC, CNN, TBS, TNT, HGTV, and Discovery+. Creating one of the biggest media and entertainment companies in the world.

According to the European Commission’s inquiry, the proposed merger could lead to a significant concentration in the European Economic Area nations where Paramount and Universal have a partnership. This could cause issues in the film distribution market.

Additionally, the studio will not be permitted to make any more direct or indirect arrangements with Universal for the cooperative distribution of movies in those nations for ten years.

Additionally, if Paramount also distributes Universal or Disney films in the European Economic Area countries where the International Union of Producers (IUP) operates. It will be illegal to switch the distribution of Warner films from the current distributor to one that Paramount uses during that decade.

The Warner merger was already cleared by the US Department of Justice in June of last year after officials determined that the deal would not hurt competition in the markets for television, streaming, and content creation.

However, a coalition of 12 states filed a lawsuit to stop the merger owing to monopoly fears, and last Monday a court in that nation imposed a temporary stay to the merger for at least 14 days.