The European Commission gave conditional approval on July 22, 2026, for Paramount Skydance Corporation's $110 billion purchase of Warner Bros. Discovery. The decision clears a major regulatory hurdle, but a lawsuit from 12 US states has temporarily blocked the deal from going through. Reuters

The approval comes with strings attached. Paramount must end its European film distribution partnership with Universal. The two studios jointly run a company called Universal International Pictures (UIP), which handles the release of their films in markets outside the US. The European Commission, which acts as the EU's competition watchdog, determined that if Paramount combined its share of UIP with Warner Bros. Discovery's movie catalog, the merged company would have an unfair advantage over competitors in Europe. European Commission

Under the conditions, Paramount must leave UIP within 13 months of the deal closing. Paramount also agreed not to co-distribute films with Universal, directly or indirectly, for a period of ten years. Engadget

The EU review moved quickly. Paramount Skydance asked for EU antitrust approval around June 2, 2026, and submitted proposed fixes about a month later, around July 1. The deal also went through a review under the EU Foreign Subsidies Regulation, which checks whether companies receiving unfair government support from outside the EU are trying to buy businesses inside it. That review had a deadline of July 14, 2026. Reuters

Warner Bros. Discovery stockholders had already approved the merger at a Special Meeting on April 23, 2026. Paramount Skydance then raised its all-cash offer to $30 per share for all outstanding WBD shares on June 30. The deal traces back to a formal letter Paramount sent to WBD shareholders on December 10, 2025, laying out the acquisition proposal. WBD Investor Relations Paramount Press

While the EU is satisfied, the US situation is more complicated. The Department of Justice has approved the deal, but a legal challenge from 12 US states has temporarily paused it. A judge placed a two-week hold on the transaction on July 20, and a hearing is set for August 3 to decide whether the state lawsuit deserves a full trial. Engadget

UK regulators have also said they may want to review the deal, adding another layer of uncertainty. Reuters

The timing pressure is intense. If the deal does not close by the end of September, Paramount faces a penalty of about $7 million per day until it does. Bloomberg

That means every week of delay past the end of September would cost roughly $49 million. The August 3 hearing in the US state lawsuit therefore carries real financial stakes. If the court orders a full trial, the proceedings could push the closing date well beyond the September deadline.

There is also a competitive angle. A filing with the SEC in February 2026 opposed a competing bid for Warner Bros. Discovery by Netflix, arguing that Paramount's offer was the better choice. Paramount SEC Filing

The broader context here is one of accelerating media consolidation. The Paramount-Warner Bros. Discovery combination would unite two of the largest film and television libraries in the world, bringing together content that spans movie theaters, streaming services, and traditional TV channels. The EU's focused remedy on UIP points to a specific worry: that combining Paramount's and Warner's movie lineups under a single European distribution pipeline, strengthened by an existing partnership with a competitor, could shut rival distributors out of theaters on fair terms.

The ten-year ban on Paramount and Universal co-distributing films is a notably long restriction. Antitrust regulators usually prefer permanent fixes, like selling off a business outright, and the 13-month UIP exit requirement effectively works that way. But the decade-long prohibition on any co-distribution with Universal goes further than a clean split, suggesting the Commission wanted to make sure the two companies could not rebuild the relationship in a different form.

For Paramount, the path forward now depends on three jurisdictions. The EU is settled. The US Department of Justice has cleared the deal. But the 12-state lawsuit, the UK's possible intervention, and the September closing deadline create a narrow and unforgiving timeline. The August 3 hearing will be the next decisive moment.