The proposed merger between Paramount and Warner Bros. Discovery has cleared competition and foreign investment reviews in more than a dozen countries, but three major regulatory hurdles remain.
According to Deadline, Paramount disclosed in an SEC filing that competition authorities in Australia, New Zealand, Saudi Arabia, Ukraine, Serbia, and North Macedonia have approved the deal. Foreign direct investment authorities in Germany, Slovenia, Belgium, Czechia, New Zealand, Italy, France, and Romania have also signed off.
The deal still requires approval from the U.S. Department of Justice, the European Union, and the United Kingdom. The U.K.'s Competition and Markets Authority opened a Phase 1 inquiry earlier this week and set an August 7 deadline to determine whether there is a realistic prospect of substantial harm to competition. If regulators find that threshold is met, the investigation moves to a more intensive Phase 2 review. The EU's Phase 1 inquiry runs through July 7.
Paramount announced plans to acquire Warner Bros. Discovery in late February. The deal values the company at $110 billion in enterprise value, which includes debt, and $81 billion in equity value, at $31 a share in cash. The David Ellison-run company has said it expects to close in the third quarter.
The agreement includes a financial incentive built in for Warner Bros. Discovery shareholders if the deal drags past September 30. Under those terms, WBD shareholders would receive an additional $0.25 per share for each quarter the deal remains unclosed, measured daily.
Australia's competition regulator, the ACCC, concluded that the merger "is unlikely to have the effect of substantially lessening competition in relation to the wholesale supply of films for theatrical release in Australia." The ACCC also found that the combined company "is unlikely to have a sufficiently strong position in the supply of wholesale [audiovisual] content to enable it to successfully foreclose rivals' access."
The outcome of the DOJ and EU reviews is expected to be known before the end of summer.
