Paramount, Warner Bros. Face Multistate Lawsuit Seeking to Block Merger
Paramount Skydance's (PSKY) proposed acquisition of fellow media and entertainment giant Warner Bros. Discovery (WBD) is facing a multistate lawsuit in the US alleging that the roughly $110 billion deal would lessen competition in several areas. Earlier this year, Paramount entered into an agreement to buy Warner Bros. after streaming giant Netflix (NFLX) withdrew from its proposed deal to purchase the HBO Max owner. A coalition of 12 state attorneys general filed the lawsuit in the US District Court for the Northern District of California, led by California Attorney General Rob Bonta, seeking to block the deal. The complaint alleges that the transaction violates the Clayton Act, which holds that mergers that may significantly reduce or tend to create a monopoly are illegal. The deal seeks to combine two of Hollywood's five major film distributors and two of the five major basic cable channel owners. In the US alone, the merged entity would control almost one-third of theatrical motion pictures and one-third of basic cable programming, according to the lawsuit. "The unlawful merger of these two entertainment behemoths would lead to higher prices, lower quality, and less.
Paramount Skydance's (PSKY) proposed acquisition of fellow media and entertainment giant Warner Bros.
Discovery (WBD) is facing a multistate lawsuit in the US alleging that the roughly $110 billion deal would lessen competition in several areas.
Earlier this year, Paramount entered into an agreement to buy Warner Bros. after streaming giant Netflix (NFLX) withdrew from its proposed deal to purchase the HBO Max owner.
A coalition of 12 state attorneys general filed the lawsuit in the US District Court for the Northern District of California, led by California Attorney General Rob Bonta, seeking to block the deal.
The complaint alleges that the transaction violates the Clayton Act, which holds that mergers that may significantly reduce or tend to create a monopoly are illegal.
The deal seeks to combine two of Hollywood's five major film distributors and two of the five major basic cable channel owners.
In the US alone, the merged entity would control almost one-third of theatrical motion pictures and one-third of basic cable programming, according to the lawsuit. "The unlawful merger of these two entertainment behemoths would lead to higher prices, lower quality, and less.