The US Justice Department has approved the $111 billion merger of Warner Bros Discovery and Paramount, controlled by the Ellison family. The antitrust division completed its review after eight months of investigation and determined the deal would not harm competition or consumers.
"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, including with respect to streaming video on demand, linear television, and studio development, production, or distribution of films for theatrical release," the agency said.
The merger combines two major media companies and will unite Paramount's CBS News network with Warner Bros Discovery's CNN, along with HBO and extensive film and television assets. The combined entity will control significant streaming platforms and content libraries as the industry adapts to changing viewing habits.
During its investigation, the Justice Department received over two million documents from more than 80 custodians, along with substantial data and materials from third parties across the media and entertainment industry.
Despite the federal approval, significant hurdles remain. The UK Competition and Markets Authority opened an investigation into the merger and set an August 7 deadline to determine whether it requires deeper review. European regulators are also investigating the funding behind the deal, which includes $24 billion in commitments from three Gulf sovereign-wealth funds. Australia has already approved the transaction.
California Attorney General Rob Bonta indicated the deal remains under investigation by his office and is "not a done deal." A coalition of US state attorneys general could potentially file a lawsuit to block the merger in coming weeks, according to reports.
Paramount stated the deal is "pro-competitive" and positions the company to better compete against dominant technology platforms. "This deal is pro-competitive, resulting in a stronger company better positioned to compete against dominant technology platforms in an industry increasingly defined by intense competition for audiences, talent, technology, and investment," the company said.
Critics, however, expressed strong opposition. Craig Aaron, co-chief executive of Free Press, argued the approval showed the fix was predetermined. "Despite all the talk about conducting a thorough investigation, the fix was in at the Trump Justice Department from the start," he said. Concerns persist about the merger potentially merging the two news networks and eliminating jobs, as the companies have promised $6 billion in synergies.
Democratic Senator Elizabeth Warren called the approval "terrible news for every American" and criticized the deal for appearing to involve "Trump-aligned billionaires" controlling media. Staff at both CNN and CBS News have expressed concerns about potential editorial changes and significant job cuts following the merger.