The Justice Department's Antitrust Division has closed its investigation into the proposed $110.9 billion merger of Paramount Skydance and Warner Bros. Discovery, clearing a critical federal hurdle for a deal that would create one of the largest media conglomerates in history — even as a coalition of state attorneys general prepares to litigate its own challenge.

The DOJ's exit from the review removes the most consequential regulatory threat at the federal level. The deal, announced on February 27, 2026, calls for Paramount Skydance to acquire Warner Bros. Discovery at $31.00 per share in cash, with the full consideration backstopped by the Ellison Family Trust. David Ellison, Chairman and CEO of Paramount, has been the central architect of the transaction. The boards of both companies unanimously approved the agreement.

WBD stockholders voted to approve the deal on April 23, 2026, the date the company had set for its Special Shareholder Meeting. Shareholder assent, combined with the DOJ closure, leaves state enforcement and any outstanding foreign regulatory approvals as the remaining obstacles to a Q3 2026 targeted close.

The State Challenge

The federal clearance does not foreclose state-level antitrust action. California, New York, and other states are preparing a lawsuit to block the acquisition, Reuters reported on June 5, 2026. State attorneys general have been conducting a months-long investigation into whether the combined entity would harm competition — particularly in content licensing, streaming, and linear television distribution.

State AG challenges to major mergers are procedurally distinct from DOJ proceedings and can proceed independently under both federal antitrust law and state unfair competition statutes. The California AG's office had signaled as early as February 2026 that it was prepared to act even if federal regulators stood down. That warning has now materialized into active litigation preparation.

The sequence matters. DOJ reviews are typically resolved before state enforcement reaches the filing stage, and companies often negotiate consent decrees with federal authorities that can moot or complicate parallel state cases. Here, the DOJ's clean exit — with no reported remedies or divestitures — provides the states no federal framework to leverage or oppose. They would need to build an independent theory of harm and secure injunctive relief in federal or state court before the deal closes.

What's at Stake

The combined company would bring together the IP libraries, distribution infrastructure, and streaming platforms of both Paramount and Warner Bros. Discovery. The combined entity's leverage over content licensing for third-party distributors and its position across both ad-supported and subscription streaming tiers are almost certainly at the center of the states' competition concerns.

The $31.00 per share final figure represents a modest but meaningful premium over the $30.00 per share all-cash offer Paramount had enhanced in an earlier bid. The upward revision, combined with the Ellison Family Trust backstop, was designed to address concerns about financing certainty — the kind of execution risk that can kill large leveraged media transactions even after regulatory clearance.

The path to Q3 2026 close is narrower than the DOJ exit makes it appear. A preliminary injunction from even a single state court could delay or block closing until the litigation is resolved, and courts have shown willingness to grant such injunctions in high-profile merger cases. The companies will need to move quickly to assess the states' legal theory and determine whether a negotiated resolution — possibly involving behavioral commitments on licensing or distribution — is preferable to contested litigation on a compressed timeline.