Paramount will not close its pending $110 billion merger with Warner Bros. Discovery prior to July 22 as European regulators continue to review the transaction.
The updated timeline comes as Oregon AG Dan Rayfield is seeking a court order that would delay the deal from closing for 60 days while the state reviews the David Ellison-led media giant’s records. In a statement, Rayfield’s office claimed that Paramount had previously agreed that it would not close the deal before July 16, but didn’t commit to hold off any longer after that.
“We’re not going to let Paramount Skydance play hide the ball so they can rush through their massive merger,” Rayfield said. “Oregonians have a real stake in this deal – in our film industry, in our economy, in the choices they’ll have as consumers. Paramount had every opportunity to hand over records and answer a few basic questions. Instead, it is trying to run out the clock and evade scrutiny. We’re asking the court to make sure Oregonians get the answers they’re owed before this deal closes, not after.”
ODOJ presented its motion in person in Multnomah County Court on Wednesday afternoon. The state’s request asks the court to require Paramount to fully comply within three days of an order and to bar the company from closing the WBD deal for 60 days from the date it substantially complies.
A hearing on the matter has been scheduled for next Monday at 10 a.m.
Oregon has been investigating the merger since it was first announced in February and claimed that Paramount had not complied with a records request that was sent to the company in June. That request asked for documents about the company’s lobbying of federal officials in support of the deal, its role in a U.S. Department of Justice statement approving the merger and an internal effort referred to as “Project Warrior.”
A Paramount spokesperson told TheWrap it has provided ODOJ with all of the relevant documents that it requested for the merger and that the information it is seeking has “nothing to do with whether this transaction complies with Oregon’s antitrust laws and is not a legitimate basis to delay a plainly lawful, pro-competitive transaction.”
In addition to its records request, Oregon is part of a group of state AGs, including New York and California, that are mulling filing a potential lawsuit to block the Paramount-WBD deal.
Despite Oregon’s probe, Paramount emphasized that the July 22 timeline was adjusted to align with the European Commission’s extended deadline to decide whether it will clear the merger or refer it for a more in-depth Phase 2 investigation.
The extension of the EU’s Phase 1 investigation from July 7 came after Paramount submitted concessions in an effort to address the regulator’s concerns about the merger’s potential impact on competition. Remedies discussed during a meeting with EU officials last month included withdrawing from United International Pictures, an international film distribution joint venture with Universal.
“Under the Commission’s process, it has an additional 10 days to consider remedies, extending the period required for the transaction to achieve clearance. This is publicly known and should not be interpreted as a target date for transaction close,” Paramount’s spokesperson said. “Reports that Paramount has adjusted its transaction timeline due to the motion brought by the Oregon Department of Justice are factually incorrect.”
In addition, U.K. Secretary of Culture, Media and Sport Lisa Nandy informed Paramount and WBD that she’s “minded to intervene” in the deal and asked for her concerns to be addressed by this past Monday.
“Antitrust authorities around the world, including in Australia, Canada, China and the United States, have carefully reviewed this transaction, clearing it or concluding that it does not violate any competition laws,” the Paramount spokesperson continued. “That regulatory record underscores what the facts, the law and the economics make clear: this transaction will create a stronger challenger to dominant global streaming and technology platforms, expand consumer choice, increase investment in premium content and theatrical distribution, and create more opportunities for creators and workers.”
Paramount said any attempt to delay the transaction would “undermine those benefits and protect entrenched incumbents from the stronger competition this merger will create,” adding it would “vigorously defend against such efforts in court.”
The Paramount-WBD deal is expected to close by the end of the third quarter. In the event the transaction does not close by Sept. 30, WBD shareholders will receive a 25 cent per share “ticking fee” for each quarter until closing. In the event that the deal does not close at all due to regulatory matters, Paramount will pay WBD a $7 billion termination fee.
The post Paramount Won’t Close Warner Bros. Merger Before July 22 appeared first on TheWrap.
