US States May Sue to Block Paramount's Warner Bros. Discovery Acquisition Over Antitrust Concerns

WASHINGTON (CNA) - Multiple U.S. states are considering filing lawsuits as early as next week to block Paramount's proposed $110 billion acquisition of Warner Bros. Discovery, citing concerns that the deal could harm market competition, according to two people familiar with the matter.

Reuters reported that the states did not specify their exact competitive concerns, but advocacy groups and some state regulators have warned that the merger could lead to higher subscription fees for streaming platforms, job cuts at the combined company, and a reduced selection of movies, news, and other content.

Any delay in the transaction due to legal challenges could significantly increase costs for Paramount, which is expected to carry approximately $80 billion (NT$2.57 trillion) in debt after the deal closes.

Paramount CEO David Ellison has agreed to pay Warner Bros. Discovery shareholders a delay compensation of 25 cents per share, totaling about $650 million (NT$20.9 billion) in cash per quarter, if the transaction is not completed by October.

Reuters reported in early June that as U.S. federal antitrust regulators adopt a more favorable stance towards corporate mergers, California, New York, and several other states were preparing to file lawsuits to strengthen scrutiny of large mergers.

California Attorney General Rob Bonta is leading an investigation into whether the deal violates U.S. merger laws that prohibit actions that illegally harm market competition. A spokesperson for Bonta's office declined to comment, and a spokesperson for Paramount did not immediately respond to Reuters' inquiry. (Intern reporter: Zhuo You'an / Editor: Liu Wenyu) 1150709

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