US approves Paramount's purchase of Warner for $111 billion

The U.S. Department of Justice has approved Paramount Skydance's acquisition of Warner Bros. Discovery, clearing the path for a mega-merger valued at around $111 billion. The Antitrust Division gave its clearance without demanding any changes, concluding an eight-month review and paving the way for one of the largest media mergers in recent years.

The department stated that the operation "is unlikely to result in harm to competition or U.S. consumers" and could even increase competition. This approval is a significant win for Paramount CEO David Ellison, whose father, Oracle co-founder Larry Ellison, largely financed the acquisition. Larry Ellison, one of the world's wealthiest individuals, is a close ally of former President Donald Trump.

Paramount secured the deal partly due to Larry Ellison's financial guarantee, which ultimately convinced the Warner Bros. board and ended a bidding war with Netflix. The resulting company will control a vast portfolio of assets, including CNN, Warner Bros. Pictures, and the streaming platform HBO Max.

However, federal approval does not eliminate all legal risks. A coalition of about 10 states, led by California, is preparing an antitrust lawsuit, according to Bloomberg. California's Attorney General's office stated this week that the acquisition "remains under active investigation." The European Commission is also evaluating the merger's appropriateness for its market.

Hollywood is uneasy about the deal, with hundreds of actors and directors signing a letter opposing the merger and warning of impacts on production in an industry already affected by years of cutbacks. The Justice Department countered these fears, arguing that evidence did not demonstrate the merger would reduce production.