Paramount's Strategic Play to Acquire Warner Bros Discovery: A Smoother Path in the EU

Paramount Skydance is poised to secure EU antitrust approval for its acquisition of Warner Bros Discovery with minimal divestments. The deal is less encumbered by regulatory hurdles, as combined market share remains under 20% in Europe. Approval under the EU's foreign subsidies regulation is also required due to foreign financial backers.

Paramount Skydance appears on track to obtain European Union antitrust clearance for its acquisition of Warner Bros Discovery with potentially minor divestments needed, insiders revealed on Friday. Unlike Netflix's failed bid, Paramount's offer faces fewer regulatory barriers, given the combined market share staying below the critical 20% threshold in Europe.

The European Commission typically scrutinizes mergers when market share reaches or exceeds 30%, but Paramount has yet to officially initiate the EU approval procedure. However, it has begun sharing pertinent business details. Additionally, the acquisition will require compliance with the EU's foreign subsidies regulation, as the Saudi Public Investment Fund, Abu Dhabi's L'imad Holding, and Qatar Investment Authority are financially backing the proposal.

While Paramount declined to comment, insiders indicated the company might divest minor channels if necessary to secure approval. Overlapping interests in TV and film include Paramount's Nickelodeon and Warner Bros' Cartoon Network. Paramount's pursuit of regulatory approvals spans the U.S. and UK, with high-level meetings signaling their determination to solidify the deal.