Paramount Skydance has agreed to postpone the finalization of its purchase proposal for Warner Bros. Discovery, extending the potential deadline until June 2027. This delay comes amidst ongoing legal proceedings in the United States, which could result in an increase in the total cost of the transaction.
Legal Action and Restraining Order
Last week, a group of US state attorneys general, led by California Attorney General Rob Bonta, filed a lawsuit alleging that the merger could harm competition. In response, the judge overseeing the case issued a temporary restraining order on Monday (20), causing an initial delay in the completion of the union.
Previously, Paramount had repeatedly stated its intention to close the deal by the end of September. Even with the postponement, the company classified this development as a 'significant victory' in a statement released this Friday (24).
Paramount's Stance on the Trial
In an official note, the company stated that it views the progress of the process favorably, as it allows the case to be evaluated directly based on evidence. Paramount asserted: 'The outcome is exactly what we have sought from the beginning: a direct path to an evidence-based trial. This is the fastest and clearest way to prove that this transaction is good for competition, good for consumers, and good for creators, a conclusion that dozens of competition authorities around the world have already reached.'
Additionally, the company refuted the arguments presented by the plaintiffs, declaring: 'The plaintiffs' market definitions have no relation to the reality of the current market and do not withstand closer scrutiny. We look forward to proving our case at trial.' Following the release of this information, Paramount Skydance shares fell by 3% during afternoon trading on that Friday.
Financial Impact of the Delay
Under the terms established between the companies, Paramount must pay a progressive fee, known as a 'ticking fee,' to Warner Bros. Discovery shareholders if the deal closing extends beyond the September 30th deadline. This payment will add US$ 0.25 (R$ 1.27) per share for each subsequent quarter until the acquisition is completed. This financial mechanism could represent approximately US$ 650 million (R$ 3.3 billion) in quarterly amounts.
Previous Regulatory Approvals
Paramount and Warner Bros. Discovery announced the merger agreement in February, after the company led by David Ellison surpassed an offer made by Netflix. The deal, valued at US$ 110 billion (R$ 560.7 billion), would unite two major Hollywood studios, two popular streaming services, and several television networks.
The operation already received the green light from the U.S. Department of Justice's antitrust division in June. More recently, European Union (EU) antitrust regulators also approved the transaction earlier this week. Despite these approvals, attorneys general from various American states argue that the merger could reduce competition in the sector and cause job losses in the film industry.
When filing the lawsuit last week, California Attorney General Rob Bonta warned that the deal could be detrimental to both consumers and industry businesses. He stated: 'The illegal merger of these two entertainment giants would lead to higher prices, lower quality, and less content for cinema and television, harming movie theaters, basic cable distributors, and ultimately, the public in every sofa and cinema seat in the US.'