American justice validates the Paramount-Warner Bros. merger. Discovery

After 8 months of investigation, the American Department of Justice validated the sale at $111 billion without imposing the slightest concession. An important victory for David Ellison and Paramount Skydance, even if several legal challenges could still complicate the birth of this future entertainment giant.

The mega deal between Paramount Skydance and Warner Bros. Discovery takes a decisive step forward.

The US Department of Justice (DOJ) has validated the proposed merger of the two Hollywood giants, thus overcoming one of the most important regulatory obstacles on the road to this colossal operation estimated at $111 billion.

As revealed Politico and then confirmed by Varietythe DOJ’s antitrust division gave the green light without requiring any concessions, divestment of assets or corrective action. After eight months of investigation, the authority considers that the merger is “notnot likely to harm competition or American consumers“.

This future entity would therefore bring together under one roof an impressive collection of brands and studios: CBS, CBS News, Paramount Pictures and Paramount+ on the Paramount side, as well as HBO, HBO Max, Warner Bros. Pictures, CNN, TNT, TBS and even HGTV from Warner Bros. Discovery.

In a press release, the DOJ emphasizes having examined more than two million documents from more than 80 players in the sector, conducted hearings of executives and interviewed numerous witnesses before arriving at this conclusion. The American administration asserts that the film and television industry remains dynamic and competitive enough to absorb such a merger without major risk to the public.

However, this decision comes in a context of strong protest in Hollywood. More than 5,500 professionals in the sector signed an open letter calling for the operation to be blocked. Among them are Florence Pugh, Pedro Pascal, Ben Stiller, Kristen Stewart, Mark Ruffalo and Robert De Niro. Opponents fear a reduction in competition, an increase in prices and above all significant job cuts.

These concerns are all the greater as Paramount has already indicated that it hopes to generate more than $6 billion in savings through the merger, an objective which could result in a new wave of layoffs in an industry already shaken by several years of restructuring.

Despite this major validation, the file is still far from being definitively closed. Several U.S. attorneys general, including California’s, are still considering filing lawsuits to try to stop the merger. For her part, Senator Elizabeth Warren denounced a decision that she considers favorable to “billionaires close to Donald Trump” and called on the States to continue the fight.

The project is also subject to regulatory reviews in the United Kingdom and the European Union. Brussels is particularly interested in the approximately 24 billion dollars provided by sovereign funds from Saudi Arabia, Qatar and Abu Dhabi to finance the operation.

For Paramount Skydance, the green light from the DOJ nevertheless constitutes a decisive step. The group believes this merger will create a player powerful enough to compete with the technology giants that increasingly dominate the global entertainment sector. It now remains to be seen whether the European authorities and possible American legal proceedings will allow the marriage to go through to completion.