A federal judge in California on Monday ordered Paramount Skydance and Warner Bros Discovery to temporarily pause their merger while a case brought by multiple states challenging the deal moves forward. The companies are prohibited from closing their US$110 billion deal for 14 days until another hearing is held on August 3 regarding a preliminary injunction, which would prevent Paramount and Warner Bros from closing the transaction before a final decision is reached. A federal judge today ordered Paramount Skydance and Warner Bros.
Discovery to halt their $111 billion merger, handing an early win to states that sued to block the deal. The ruling granted a temporary restraining order prohibiting the firms from completing the merger and from consolidating their operations. The temporary order is only in effect for 14 days, but it can be converted into a preliminary injunction that would prevent the merger from being completed until the case is resolved.
The temporary restraining order can be extended past the 14-day period if more time is needed to rule on a preliminary injunction. A group of 12 states led by California sued the companies last week in an attempt to block the deal, which had been approved by the Trump administration. The states say the merger will eliminate competition by combining two of the five major Hollywood movie studios, and two of the five major owners of basic cable TV channels.Read full article Comments
US court temporarily stops Paramount and Warner Bros merging after 12 states launched legal action. Paramount risks $650m quarterly fees if merger delays extend beyond September, as per the merger agreement terms. Twelve states, led by California, sued to block Paramount’s pending buyout of Warner last week, alleging that such a combination would 'extinguish competition' in Hollywood.
The delay is intended to give the court time to consider a lawsuit that argues the $111 billion merger violates antitrust laws.
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