Key facts
- US approval granted for Paramount's proposed acquisition of Warner Bros. Discovery.
- DOJ career staff reportedly favored challenging the $111 billion deal on antitrust grounds.
- Senior DOJ leadership approved the deal, overriding staff concerns.
- Senator Elizabeth Warren suggested the approval may be a political favor, citing corruption.
- The DOJ stated the merger will boost streaming competition and not harm theatrical film markets.
- US states and EU regulators are expected to scrutinize or challenge the deal.
The US Department of Justice has approved Paramount's proposed $111 billion acquisition of Warner Bros. Discovery, a decision that reportedly surprised career antitrust lawyers who had been leaning toward recommending a lawsuit. According to The Wall Street Journal, senior DOJ leaders closed the investigation before staff concerns about anticompetitive effects and the company's debt load could be fully addressed.
Senator Elizabeth Warren has voiced strong criticism, suggesting the approval might be a political favor and "reeks of corruption." The DOJ, however, stated in its announcement that the merger is expected to enhance competition in the streaming video market and would not harm the theatrical film industry.
Despite federal approval, Paramount faces further challenges, including potential lawsuits from US states and ongoing scrutiny from European Union regulators regarding the deal's financing and competitive impact. The involvement of sovereign wealth funds from Saudi Arabia, the UAE, and Qatar also necessitates an FCC waiver.
Sources familiar with the matter indicated that a meeting with Paramount CEO David Ellison, son of Trump ally Larry Ellison, helped persuade DOJ leaders to approve the deal. The DOJ's antitrust division has seen leadership changes, with a former Trump nominee, Gail Slater, having pushed for tougher enforcement before her departure.