Paramount-Warner Bros. Merger Formally Investigated By UK Competition Watchdog

The UK’s antitrust authority has launched a formal investigation into the $110 billion merger between Paramount and Warner Bros. Discovery (WBD).

The Competition and Markets Authority (CMA) said on Tuesday that it had opened a “merger inquiry” into the deal that will reshape the global entertainment industry.

The CMA will commence its so-called Phase 1 investigation from Wednesday, under which it will determine whether the Paramount-Warner pact poses a “realistic prospect of a substantial lessening of competition.”

The CMA intends to conclude the Phase 1 process by August 7. If the threshold is met, the competition watchdog will move to a deeper Phase 2 investigation, which can last for more than five months.

If the CMA does proceed to a more detailed analysis, it will raise serious questions about Paramount’s ambition to close the WBD takeover in the third quarter of this year.

The CMA opened the Phase 1 investigation after initially seeking comments on the deal in April.

Antitrust work is also ongoing in the European Union, where a Phase 1 investigation is underway with a deadline of July 7. Competition scholars have predicted that a Phase 2 investigation is likely.

Bloomberg reported this week that Paramount is prepared to divest some of its children’s TV network assets to clear any regulatory hurdles in the EU.

Paramount Skydance CEO David Ellison visited the UK earlier this year as part of a charm offensive of European regulators. He met with UK culture secretary Lisa Nandy, as well as prominent European creatives.