Just when everyone thought the saga of the sale of Warner Bros. Discovery had come to an end, with Paramount Skydance's $110 billion offer in February, the United States Judiciary added a new season to the corporate drama that this transaction has become.
On Monday, July 20, Judge Araceli Martínez-Olguín of the United States District Court for the Northern District of California ruled that the companies must postpone the completion of the agreement for 14 days.
The judge argued that the transaction "probably" violates antitrust laws, a setback for Paramount and Warner Bros., who had hoped to finalize the deal on Wednesday, July 22, according to Bloomberg news agency.
A hearing has been scheduled for August 3 to determine whether the suspension will be extended until after the trial that will determine if the agreement violates U.S. antitrust rules.
The news caused Warner's shares to fall in trading - around 4:10 pm, the shares were down 3.82%, at US$ 25.84.
The halt was ordered after a group of 12 US states filed a lawsuit against Paramount to try to block the purchase of Warner. The allegation is that the megadeal will harm competition in the film and television markets by combining two of the five largest Hollywood studios.
In her ruling, the judge stated that the states demonstrated that "serious questions regarding the merits remain" in their challenge to the merger. According to the states, the agreement would give Paramount Skydance control of 27% of the market for films widely released in theaters.
The delay in approval will be costly for Paramount. According to Bloomberg , the company has until June 4, 2027 to complete the deal, but will have to start paying Warner Bros. a daily fee of $7 million from September 30 until the transaction is finalized.
Paramount won the battle with Netflix for Warner. The streaming pioneer had agreed, in December, to an $82.7 billion deal, including assumed debt, to acquire Warner's studio and streaming businesses.
But successive counter-offers from Paramount for the entire company reignited the dispute. The company, led by David Ellison , son of Larry Ellison, co-founder of Oracle , won the battle after offering US$31 per share in cash.
The acquisition, if it goes through, will unite two Hollywood studios responsible for legendary films such as Casablanca, Harry Potter , and Mission: Impossible ; two major news networks, CNN and CBS ; the streaming giant HBO Max; and dozens of cable channels.
Paramount also enjoyed the support of Donald Trump . According to CNBC , the President of the United States stated in December that Netflix's purchase of Warner "could be a problem" because of the market share the company would then have.
According to CNBC , in a document sent to the Securities and Exchange Commission (SEC, the US equivalent of the CVM) , Paramount revealed that its offer is backed by Jared Kushner, Trump's son-in-law and former White House advisor.
