Brussels, Belgium. Paramount Skydance is expected to win European Union antitrust approval to buy Warner Bros Discovery, with any divestments required to address regulatory concerns likely to be minor, two people with direct knowledge said.
EU market share and regulatory assessment
The sources said Paramount’s offer faces fewer regulatory hurdles because a combined Paramount and Warner Bros would have a market share below 20% in all markets across Europe. They said European Commission antitrust regulators usually take a tough line when market share is 30% or more.
Paramount has not formally sought EU approval but is providing information on its businesses, the sources said.
Foreign subsidies regulation review
The deal would also require approval under the EU’s foreign subsidies regulation because Saudi Arabia’s Public Investment Fund, Abu Dhabi’s L’imad Holding Company and the Qatar Investment Authority are also bankrolling the bid, the sources said. The foreign subsidies regulation targets unfair foreign state aid.
Paramount declined to comment. The European Commission did not immediately respond to a request for comment.
Potential divestments and overlapping businesses
The sources said Paramount hopes to secure unconditional EU approval but is willing to divest minor channels, such as its children’s brands, if required. They said overlapping businesses include the combination of two studios and several TV channels.
Paramount has Nickelodeon while Warner Bros owns the Cartoon Network.
Timeline and other approvals
Paramount is likely to seek formal EU approval in the coming months, the sources said. That would trigger a 25-working-day preliminary review, which can be extended by 10 working days if remedies are offered at the end of the 25 days.
The sources said California may be the biggest obstacle to the deal, and that regulatory approvals from the United States and the United Kingdom are also key requirements.
What do you expect regulators to focus on most in reviewing the proposed deal?
