European Union antitrust regulators on Wednesday approved Paramount Skydance’s proposed $110 billion acquisition of Warner Bros. Discovery, removing one of the final major international regulatory hurdles for what would become one of the largest media mergers in recent years.
The clearance comes with legally binding concessions from Paramount aimed at preserving competition in Europe’s film distribution market. However, while the decision represents a significant boost for the companies, the merger now faces its biggest test in the United States, where a lawsuit from a coalition of state attorneys general has temporarily halted progress toward closing the transaction.
Investors welcomed the European approval, sending Paramount shares about 3% higher in midday trading.
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The European Commission said it approved the transaction after Paramount agreed to divest its stake in United International Pictures (UIP), a long-standing European film distribution joint venture. The company also committed not to enter into any film distribution agreement with Universal Pictures in Europe for the next decade.
According to the Commission, the commitments fully resolve concerns that the merged company could coordinate distribution activities with Universal or Disney, potentially reducing competition for theatrical releases across Europe.
“These commitments fully address the competition concerns identified by the Commission by ensuring that the films of the merged entity will not be distributed jointly with those of Universal or Disney,” the Commission said.
The remedies highlight regulators’ increasing scrutiny of distribution networks, particularly as Hollywood studios seek greater scale to navigate slowing box office recovery, rising production costs and intensifying competition from global streaming platforms.
If completed, the merger would reshape the global entertainment industry by combining two of Hollywood’s most valuable film studios and some of the world’s best-known television and streaming brands. The combined company would control Paramount Pictures and Warner Bros. Pictures, alongside streaming platforms Paramount+ and HBO Max, while bringing together premium television assets including CBS, CNN, Discovery Channel, Nickelodeon, TNT Sports, Cartoon Network, HGTV, Food Network and a vast library of television and film content.
The transaction is designed to create a media giant with greater financial scale, stronger bargaining power with advertisers and distributors, and a broader direct-to-consumer streaming business capable of competing more effectively against technology-backed rivals such as Netflix, Amazon and Apple, all of which have dramatically increased spending on original entertainment.
Industry analysts have long argued that consolidation has become necessary as traditional television revenues decline and studios struggle to generate consistent profits from streaming, forcing media companies to seek larger subscriber bases and greater operating efficiencies.
The merger has already secured approval from the U.S. Department of Justice’s Antitrust Division, as well as regulators in several other jurisdictions, suggesting that competition authorities outside California have concluded the transaction can proceed with appropriate safeguards.
The principal obstacle now lies in the U.S. courts.
Last week, a coalition of state attorneys general led by California Attorney General Rob Bonta filed a lawsuit seeking to block the merger on antitrust grounds. The states argue that combining two major Hollywood studios, extensive television assets, and leading streaming platforms would significantly increase market concentration and reduce competition across film production, television programming, content licensing, and digital streaming.
Earlier this week, a California district judge issued a temporary restraining order preventing the companies from taking additional steps toward completing the merger for 14 days while the court considers whether to grant a longer injunction.
Although the order is procedural and does not determine the merits of the case, it injects fresh uncertainty into the timetable for closing the transaction. Before the lawsuit, Paramount had maintained that it remained on track to complete the merger by the end of September.
Some analysts believe that achieving that target will depend largely on how quickly the California litigation is resolved. If the court extends the injunction or allows the case to proceed to a full trial, the companies could face months of additional legal uncertainty despite having cleared nearly every major regulatory review worldwide.