A California judge granted a temporary restraining order as part of the lawsuit brought by state attorneys general due to antitrust concerns
Lillian Rizzo at CNBC:
Paramount Skydance’s proposed acquisition of Warner Bros. Discovery hit its first official roadblock when a judge granted a temporary restraining order on the merger as part of a lawsuit brought by state attorneys general. California District Judge Araceli Martínez-Olguín signed off on the order Monday after hearing arguments from both sides in an Oakland courtroom on Friday. The order puts a 14-day pause on anything moving forward with the merger. Last week, a group of state attorneys general led by California’s Rob Bonta filed a lawsuit seeking to block the $110 billion acquisition due to antitrust concerns. The proposed deal would unite the storied film studios of Paramount and Warner Bros, the CBS broadcast network, a sprawling portfolio of pay TV networks that includes CNN, TNT, MTV and BET, and streaming services Paramount+ and HBO Max, under one roof. In a statement Monday, a Paramount spokesperson said the company is “confident the evidence will demonstrate that the State AGs’ antitrust arguments are without merit as their alleged markets and claims of anticompetitive effects are without any basis in modern market realities.” “This merger is lawful, pro-competitive, and will benefit consumers, creators, workers, and the entertainment industry. We will continue to vigorously defend the transaction and will look forward to the hearings on the substance of the State AGs’ action,” according to the statement.
Warner Bros. declined to comment. The lawsuit said the proposed deal would violate the Clayton Antitrust Act — a more than 100-year-old law that prohibits anticompetitive mergers and acquisitions. The lawsuit was brought by a group of states that also includes Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon and Washington. In Monday’s order, Martínez-Olguín said the coalition of state attorneys general presented “compelling evidence that the combined firm resulting from the transaction will possess substantial market share in the wide-release theatrical distribution market.”
[...] The Paramount-WBD transaction has been under review by the European Union and the U.K., which provided a new provisional deadline of July 22. The Antitrust Division of the U.S. Department of Justice signed off on the tie-up in June, clearing it of federal concerns. It has also won approval from several global jurisdictions. Paramount has said it’s on track to close the deal by the end of September. If the transaction were to be delayed beyond then, Paramount could face additional costs, namely a so-called ticking fee that kicks in if it’s not closed after Sept. 30. The fee would be an additional 25 cents paid to WBD shareholders per quarter until closing — which would equal about $650 million in cash value per quarter. Paramount also agreed to a $7 billion breakup fee if the deal doesn’t move forward due to regulatory concerns.
Good news: the disastrous Paramount/Warner Bros. Discovery merger has hit a temporary snag, thanks to Judge Araceli Martínez-Olguín granting the TRO.
See Also:
AP, via The Guardian: Judge orders pause on Paramount-Warner merger after challenge from 12 states
Reuters, via HuffPost: Judge Orders Paramount To Temporarily Pause Warner Bros Acquisition
