Paramount-Warner Bros Deal Expected to Win Easy EU Approval, Sources Say

Media giant Paramount is anticipated to receive straightforward European Union regulatory approval for its acquisition of Warner Bros Discovery, according to insider sources. The combined company would hold less than 20% market share across European markets, well below the threshold that typically triggers strict regulatory scrutiny.

Two sources with direct knowledge of the situation revealed Friday that Paramount Skydance should face minimal obstacles in obtaining European Union antitrust clearance for its Warner Bros Discovery acquisition, with any required asset sales expected to be relatively small.

The sources, speaking on condition of anonymity due to the sensitive nature of the discussions, explained that Paramount’s proposal encounters fewer regulatory challenges compared to Netflix’s previously abandoned attempt. This is because a merged Paramount-Warner Bros entity would control under 20% of market share in every European territory.

EU antitrust officials typically impose stricter scrutiny when companies reach 30% or higher market dominance. While Paramount hasn’t yet filed formal approval paperwork with the EU, the company is currently sharing business information with regulators.

The transaction will also need clearance under the EU’s foreign subsidies regulation, since Middle Eastern sovereign wealth funds are helping finance the deal. These include Saudi Arabia’s Public Investment Fund, Abu Dhabi’s L’imad Holding Company, and the Qatar Investment Authority. This regulation targets potentially unfair foreign government assistance.

Neither Paramount nor the European Commission provided comments when contacted.

According to the sources, while Paramount hopes to win unconditional EU approval, the company stands ready to sell off smaller television channels, particularly children’s programming brands, if regulators demand it. The merger would create overlapping operations including dual film studios and multiple TV networks.

For example, Paramount operates Nickelodeon while Warner Bros controls Cartoon Network.

Industry insiders expect Paramount to submit formal EU approval requests within the next few months, triggering a standard 25-working-day initial assessment period. This timeline can extend by an additional 10 working days if the company proposes remedies near the end of the review window.

However, California regulators may present the biggest challenge to completing the deal. Approvals from both U.S. and UK authorities are also essential requirements.

Since January, Paramount has been actively courting European officials. CEO David Ellison held meetings with French President Emmanuel Macron that month, while Chief Legal Officer Makan Delrahim met with Guillaume Loriot, the European Commission’s senior merger official, during the same period.

Delrahim brings familiarity with Loriot from his previous role as assistant attorney general leading the U.S. Department of Justice’s antitrust division.

European Parliament member Andreas Schwab, who previously criticized Netflix’s bid and has spearheaded negotiations on multiple technology regulations, also met with Delrahim recently. Schwab indicated that Paramount’s proposal raises fewer concerns.

“I think Paramount is something we could accept. It is a concentration in the production of films. There is no risk of a digital champion taking over the video streaming market,” Schwab stated.