Paramount's $110B Warner Deal: EU Divestiture Play Extends Deadline to July 21

In a strategic move to navigate EU merger control, Paramount Skydance has agreed to structurally separate from its film distribution joint venture with Universal Pictures—a targeted remedy that reflects tightening antitrust scrutiny on content-distribution vertical integration. Legal practitioners should note the juxtaposition: unconditional DOJ clearance versus a multistate suit threat and an EU review now pivoting from broad channel divestitures to a precise distribution carve-out. The case illustrates the growing influence of the EU Foreign Subsidies Regulation in media M&A and the tactical use of 'fix-it-first' remedies to avoid in-depth probes.

Paramount Skydance Corp has offered to divest its film distribution joint venture with Universal Pictures as a remedy to secure European Union antitrust approval for its $110 billion acquisition of Warner Bros Discovery, according to a person familiar with the matter. This tactical divestiture, disclosed on June 24, 2026, follows a June 23 meeting with EU regulators and underscores the company's strategy to address competition concerns focused on the theatrical distribution market. By offloading the partnership with Universal—which handles distribution for both studios' films in certain territories—Paramount aims to alleviate worries from European cinema operators about a combined entity controlling excessive share of film distribution and exhibition leverage. The offer, to be formally submitted by June 30, will automatically extend the European Commission's preliminary review deadline from July 7 to July 21, buying time for final negotiations.

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The offer, to be formally submitted by June 30, will automatically extend the European Commission's preliminary review deadline from July 7 to July 21, buying time for final negotiations.

The divestiture marks a shift from earlier expectations. In February 2026, Reuters exclusively reported that Paramount anticipated easy EU approval and was willing to sell only minor television channels, such as its children's brands, if required. Those channel divestitures are now off the table, indicating that regulators have zeroed in on film distribution as the primary competitive bottleneck. The joint venture with Universal, formed years earlier to streamline European distribution, gave Paramount a co-ownership stake in a critical pipeline for theatrical releases. Selling that stake would not only remove horizontal overlap but also signal to the Commission that Paramount is serious about preserving competitive access for rivals. This remedy-focused approach is common in mega-mergers; for context, Disney's acquisition of 21st Century Fox required divesting regional sports networks, and the AT&T–Time Warner deal faced similar structural demands.

Parallel to the EU antitrust review, the deal is being scrutinized under the EU Foreign Subsidies Regulation (FSR), triggered by the involvement of sovereign wealth funds from Saudi Arabia (Public Investment Fund), Abu Dhabi (L'imad Holding Company), and Qatar (Qatar Investment Authority) that are bankrolling the bid. A separate unconditional approval is expected under the FSR, suggesting the foreign subsidies do not create a distortive advantage that cannot be mitigated. Nevertheless, this dual-track review highlights the increasing complexity of cross-border media consolidation, where non-competitive financial structures now draw regulatory attention.

In the United States, the Department of Justice cleared the acquisition last week, concluding that it was unlikely to harm competition or consumers—a significant victory for the companies. However, on the same day as the EU developments, sources revealed that California, New York, and other states are preparing a lawsuit to block the deal, introducing a new layer of legal uncertainty. State attorneys general, often more aggressive than federal enforcers on antitrust, could slow or alter the transaction, particularly if they argue local market impacts not fully captured by the DOJ's review. This patchwork of U.S. judicial actions could mirror the multistate challenge to the Sprint–T-Mobile merger, which ultimately settled with concessions.