By McAllen Today Staff
OAKLAND, Calif. — California and 11 other states are asking a federal court to stop Paramount Skydance Corp.’s planned acquisition of Warner Bros. Discovery while their antitrust case proceeds.
California Attorney General Rob Bonta announced July 13 that the coalition had filed for a temporary restraining order and preliminary injunction. The states allege the proposed combination would reduce competition in theatrical film distribution and the licensing of basic cable channels, potentially leading to higher prices, less programming and fewer choices for audiences.
The proposed transaction carries an enterprise value of about billion. Under the agreement announced in February, Paramount would pay in cash for each Warner Bros. Discovery share. The companies valued the equity portion at about billion.
The states’ case is an allegation, and the court has not ruled on the merits. According to California’s Department of Justice, the coalition says the combined business would control nearly one-third of U.S. theatrical motion-picture distribution and nearly one-third of basic cable programming. The lawsuit alleges the transaction would violate Section 7 of the Clayton Act, which bars acquisitions whose effect may substantially lessen competition.
Joining California are Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington.
Companies say merger would strengthen competition
Paramount and Warner Bros. Discovery have presented the deal differently. In their merger announcement, the companies said combining Paramount+, HBO Max and Pluto would create a stronger global streaming competitor and expand consumer choice. Paramount committed to maintaining both film studios and producing at least 30 theatrical films annually across them.
Paramount said after the lawsuit was filed that it would vigorously defend the transaction. It argued that the states’ challenge misapplies antitrust law and that delaying the merger would hurt entertainment workers and protect larger streaming rivals from stronger competition.
The companies’ boards unanimously approved the agreement. Warner Bros. Discovery shareholders approved it on April 23, according to a company filing with the Securities and Exchange Commission. The transaction had been expected to close in the third quarter of 2026, subject to regulatory approvals and other closing conditions.
The merger agreement provides for an additional payment to Warner Bros. Discovery shareholders if the deal closes after Sept. 30. The states’ request for emergency relief could affect the timetable, depending on how the federal court responds.
This independently written report is based on court-related statements, SEC filings and official company materials. The source item was published by Times of San Diego.
