EU clears Paramount Skydance's Warner Bros. Discovery bid with conditions

The European Union gave conditional approval on Wednesday for Paramount Skydance's $110 billion takeover of Warner Bros. Discovery.

EU regulators had concerns about how the deal could affect film distribution in Europe. They said Paramount must end its stake in United International Pictures, a joint venture with Universal, in the European Economic Area, which includes the 27 EU member states.

The regulators also said Paramount must not directly or indirectly enter into any agreement or understanding with Universal to jointly distribute films in the European Economic Area for 10 years.

The EU said it did not have concerns about the deal's effect on film production, saying enough studios would remain as competitors in Europe. It cited major US companies such as Disney, smaller US companies such as Amazon MGM, and European studios.

The EU said the commitments address its competition concerns by making sure films from the merged company will not be jointly distributed with those of Universal or Disney. It said an independent trustee will monitor the commitments under European Commission supervision.

The bid still faces legal hurdles in the United States. A federal judge in California ordered the companies this week to temporarily pause the merger. A hearing on August 3 will consider a preliminary injunction, which would prevent the transaction from closing before a final decision.

Netflix dropped its attempt to buy Warner Bros. Discovery in February after Paramount Skydance won a bidding contest. The combined company would control assets including CNN, Warner Bros. Pictures and the HBO Max streaming service.

US President Donald Trump has shown interest in what the merger would mean for CNN, which the source said often draws his criticism. The California judge's order came after 12 states led by California sued to block the deal. The US Justice Department approved the merger last month. AFP reported that Washington's approval had not surprised many because Paramount CEO David Ellison is the son of Oracle co-founder Larry Ellison, a close ally of Trump.