Jakub Porzycki | Nurfoto | fake images
A group of state attorneys general is expected to file a lawsuit Monday challenging Paramount Skydance proposed acquisition of Warner Bros. DiscoveryCNBC's David Faber reported.
The lawsuit, which will be filed by a group that includes California Attorney General Rob Bonta, is expected to try to block the merger on antitrust grounds, Faber reported.
The deal would combine two storied film studios, Paramount and Warner Bros., as well as streaming platforms Paramount+ and HBO Max. Paramount CEO David Ellison previously said the streaming services would become one after the merger.
It would also mean the formation of the largest portfolio of television networks in the US, bringing together Paramount's CBS broadcast network and pay TV channels such as MTV and BET with WBD's CNN, TNT and others.
The merger won approval from WBD shareholders in April, and Ellison said in a recent earnings call that it was on track to close in September.
The deal came under scrutiny from lawmakers in both the United States and Europe, including regarding the foreign financing that was part of Paramount's bid. In mid-June, the US Department of Justice approved the alliance, freeing it from federal antitrust concerns.
“The Division has completed its analysis of the proposed merger of Paramount and Warner Bros. and determined, based on the evidence received in its investigation, that the transaction is not likely to result in harm to competition or American consumers,” the department said in its determination.
The merger has also gained approval from several global jurisdictions as it moves toward a possible closing.
However, the European Union is still reviewing the deal for approval, with a new provisional deadline set for July 22. The European Commission said in a public filing this month that Paramount has tabled concessions in a bid to ease concerns about the deal.
Hollywood has previously expressed concern about the combination, citing the likelihood of fewer movie releases and the potential for job losses in the industry. Ellison has promised that once the film studios were combined they would produce a series of 30 films a year and has said he is committed to protecting jobs.
Ellison first set his sights on WBD last September. Just weeks after Paramount and Ellison's Skydance completed their merger, the company made its initial bet on WBD, resulting in several offers and a formal sale process.
WBD finally signed a deal to sell its movie studio and streaming assets to netflix. However, Paramount launched a hostile takeover bid and subsequently modified its offer. Netflix abandoned its deal and Paramount walked away with an agreement to buy all of WBD for $31 per share.
