Paramount-Warner merger faces legal setback as antitrust challenge threatens $100 billion deal (PSKY) (WBD) Federal judge pauses merger pending antitrust review The proposed merger between Paramount Skydance (NASDAQ:PSKY) and Warner Bros.
Discovery (NASDAQ:WBD) has encountered a significant legal hurdle after a US federal judge temporarily halted the transaction, casting uncertainty over a deal valued at approximately $100 billion
The merger had been expected to close as early as this week following months of negotiations that reshaped the media landscape and sidelined Netflix from the transaction. Twelve states challenge the deal The temporary injunction was granted at the request of a coalition of 12 US states, including California, which argue that the merger would breach federal antitrust laws by substantially reducing competition across multiple media markets. Judge Araceli Martínez-Olguín concluded that the states’ case has a “good chance of success” and warned that allowing the transaction to close before the legal process concludes could cause irreparable harm to competition.
A court hearing has been scheduled for 4 August to determine whether the injunction should remain in place while the case proceeds toward a full trial, currently sought by the states for April 2027. Delay could become financially costly The legal challenge presents substantial financial risks for Paramount if the transaction is not completed on schedule. Under the merger agreement, failure to close the deal before the end of September would require Paramount to pay Warner Bros. shareholders a penalty of $7 million for every day of delay.