The European Commission on Wednesday approved Paramount Skydance’s proposed acquisition of Warner Bros. Discovery for approximately $110 billion, clearing a major regulatory hurdle for one of Hollywood’s largest-ever media consolidations.
The approval is conditional on Paramount ending its long-standing film distribution partnership with Universal Pictures across much of Europe.
The decision marks a significant step forward for Skydance Media CEO David Ellison, who has led the deal, bringing the two entertainment giants closer to completing a merger that would combine major franchises and properties including Batman, HBO, The Godfather, SpongeBob SquarePants and DC Studios.
The Commission said it found no significant competition concerns in film production, noting that major rivals including Disney, Sony, Amazon MGM, A24 and Lionsgate, as well as European studios, would continue to provide strong competition across the European Economic Area.
The EU’s main concern centred on United International Pictures, a joint venture established by Paramount and Universal in 1981 to distribute their films theatrically outside the United States and Canada.
The London-based joint venture, which manages theatrical film releases across a wide range of European markets, would effectively have taken on Warner Bros. Discovery’s film slate following the merger. This would have concentrated the distribution of films from three major studios under a single commercial arrangement.
Regulators concluded that the deal could have weakened cinema operators’ bargaining position, resulting in less favourable rental and distribution terms, with the additional costs potentially passed on to consumers.
The Commission said adding Warner Bros. Discovery’s film portfolio to UIP without corrective measures would have resulted in significant market concentration and increased commercial transparency among competing studios in the European countries where the joint venture operates. These markets include Bulgaria, Croatia, Denmark, Finland, Greece, Hungary, Poland, Portugal and Romania, among others.
To secure regulatory clearance, Paramount agreed to withdraw completely from UIP within 13 months of the transaction’s completion.
In addition, the company accepted a 10-year ban on entering into any agreement with Universal to jointly distribute films in the European Economic Area.
