Court forces Paramount to halt Warner Bros. Discovery acquisition. Paramount owner could lose up to $7 million per day
Paramount Skydance must suspend its $110 billion acquisition of Warner Bros. Discovery by August 3, according to a court order.
Paramount Skydance must suspend its $110 billion acquisition of Warner Bros. Discovery by August 3, according to a court order.
According to Reuters, a federal judge made the interim ruling on Monday after a coalition of states led by California argued that the merger of these giants would cause irreparable harm to competition.
Warner Bros. Discovery shares fell as much as 4% Monday afternoon after that.
«Today’s decision is an important victory for everyone who could be harmed by this merger, and I look forward to continuing to fight this case,» said New York Attorney General Letitia James.
Meanwhile, a Paramount spokesman insists that the state prosecutors' antitrust arguments are without merit. For now, the legal wrangling surrounding the issue will continue.
Reuters recalls that the lawsuit, filed in Oakland federal court, threatens to thwart Paramount CEO David Ellison’s attempt to turn his company into a major competitor to Netflix.
In July, California and 11 other states filed a lawsuit, arguing that the potential deal would create a media giant that would have the ability to raise prices for movies and television.
The court agreed with arguments that the deal would likely violate antitrust laws if it gave the combined company 27% of the market for wide-format film distribution. However, a final decision will be made after both sides present evidence in court, which has not yet happened.
Paramount Skydance’s argument that companies like Amazon and Apple had recently entered the film market and would also create competition was insufficient to prove the legality of the merger.
Meanwhile, this situation could cause significant financial damage to Paramount Skydance. According to the merger agreement, for each calendar day the process is delayed after September 30, the owner of Paramount will be obliged to pay Warner Bros. shareholders a «commission» of 25 cents per share, or about $7 million per day.
As dev.ua wrote, in December last year, Paramount started a war with Netflix for Warner Bros. Discovery with an offer of $108.4 billion.
In March of this year, it became known that Paramount was still buying Warner Bros. Discovery and planned to combine Paramount+ and HBO Max into one streaming service.
The Ukrainian Antimonopoly Committee allowed the American Paramount Skydance to take control of Warner Bros. Discovery
The Ukrainian Antimonopoly Committee allowed the American Paramount Skydance to take control of Warner Bros. Discovery
Netflix withdraws from fight for Warner Bros. Discovery: WBD board calls Paramount Skydance’s offer better
Netflix withdraws from fight for Warner Bros. Discovery: WBD board calls Paramount Skydance’s offer better
Netflix offered Warner Bros. Discovery a cash buyout to beat Paramount’s offer
Netflix offered Warner Bros. Discovery a cash buyout to beat Paramount’s offer
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