US clears Paramount Skydance's $111 billion Warner Bros takeover

WASHINGTON: The US Justice Department on Friday approved Paramount Skydance’s $111 billion acquisition of Warner Bros. Discovery, clearing a major hurdle for one of the biggest media mergers in recent years.

The department’s Antitrust Division completed its review after eight months and did not require any changes to the transaction. The merger was "not likely to result in harm to competition or American consumers" and added that it could potentially strengthen competition.

The decision marks a significant victory for Paramount chief executive David Ellison. The deal was largely financed by his father, Oracle co-founder Larry Ellison, who is among the world’s richest men and is described as a close ally of President Donald Trump. Larry Ellison’s financial guarantee ultimately persuaded the Warner Bros. board and helped Paramount prevail over Netflix in a hard-fought bidding contest.

Before the clearance, a group of Democratic senators led by Elizabeth Warren had raised concerns about the transaction, warning that a deal involving Warner Bros. could be "tainted by political favoritism and corruption," and urging the Justice Department to assess it strictly on the basis of law and facts.

Assets and opposition

The combined company is set to hold a wide range of major media assets, including CNN, Warner Bros. Pictures and the HBO Max streaming platform.

Despite the federal approval, the transaction still faces legal risk. A coalition of around 10 states led by California is preparing an antitrust case that could be filed this month.

The proposed tie-up has also drawn opposition in Hollywood. Hundreds of actors and directors signed a letter objecting to the merger, arguing that it would further squeeze production in an industry already hit by years of consolidation and cost reductions. The Justice Department rejected that concern, saying the evidence did not show the merger would reduce output.