Key facts
- Larry and David Ellison's planned $111 billion acquisition of Warner Bros. Discovery has cleared a major regulatory hurdle.
- California and other states dropped their lawsuit seeking to block the deal.
- The settlement did not require the Ellisons to divest any part of their combined businesses.
- The Ellisons' studios pledged to produce at least 30 movies annually.
- The deal combines major media assets including two movie studios, HBO, and TV networks like CBS and CNN.
Larry and David Ellison are set to acquire Warner Bros. Discovery for $111 billion after a lawsuit filed by California and several other states was settled, removing the last significant regulatory obstacle to the deal. The settlement, led by California Attorney General Rob Bonta, did not include the structural changes Bonta had sought, which would have required the Ellisons to divest parts of their combined media empire.
Instead, the primary concession from the Ellisons is an "enforceable commitment" that their studios will produce at least 30 movies annually, a pledge Larry Ellison had already made publicly. Bonta expressed his continued opposition to the merger, stating, "I didn't believe these two companies should merge. I still don't." However, he acknowledged that he did not achieve his desired outcome.
The resolution of the lawsuit reinforces the view held by many observers that the Ellisons would ultimately succeed in their acquisition bid. Larry Ellison, with an estimated net worth of $200 billion, has the financial backing to pursue the deal, with his son David having personally guaranteed the financing. The Trump administration's Department of Justice had previously approved the deal in June, reportedly before skeptical staff attorneys could fully weigh in.
While the lawsuit temporarily slowed the acquisition process, David Ellison employed tactics, including news reports suggesting a potential relocation of Paramount's operations out of California, to pressure the states into a settlement. Although the impact of these tactics on Bonta's decision is debated, the settlement does not include a promise for Paramount to remain in California. Ultimately, the Ellisons' financial resources and the approval from regulators, including those close to Donald Trump, were seen as insurmountable factors that prevented the states' attorneys from derailing the deal.