US court halts Paramount’s $110 billion Warner Bros Discovery merger
A federal judge has issued a temporary restraining order on the proposed acquisition, citing likely violations of competition laws and irreparable harm to the market.
A US federal judge has issued a 14-day temporary restraining order on Paramount Global’s proposed $110 billion acquisition of Warner Bros Discovery, effectively pausing the transaction. US District Judge Araceli Martínez-Olguín granted the request following a legal challenge from a coalition of 12 state attorneys general, ruling that the merger is likely to violate antitrust laws and could cause irreparable harm to competition.
The legal challenge was initiated on 13 July by state attorneys general from California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington. The states filed the lawsuit in an Oakland federal court, arguing that the combined entity would become a “media behemoth” with the power to raise prices for film and television content.
Judge Martínez-Olguín noted that based on the new company’s market share, the court was persuaded that the proposed merger is likely to violate antitrust laws. The ruling modified the states’ initial request for a 28-day pause, implementing a 14-day restraining order instead. The judge determined that the states had demonstrated that irreparable harm could occur without this immediate intervention.
The coalition contended that if the deal were permitted to close, the companies could undertake hard-to-undo actions, such as immediate job cuts and the sharing of sensitive information. These measures, the states argued, would be difficult to reverse and would significantly damage competitive dynamics within the media sector.
A hearing for a preliminary injunction is scheduled for 3 August to determine the future of the deal. The timeline carries significant financial stakes for the acquirer; if the merger does not close by 30 September, Paramount will be liable for daily payments to Warner Bros Discovery investors, a penalty described as amounting to millions of dollars each day.
