The European Commission granted conditional antitrust approval on July 22, 2026, for Paramount Skydance Corporation's $110 billion acquisition of Warner Bros. Discovery, clearing a major regulatory hurdle even as a US state lawsuit temporarily blocks the transaction from closing. Reuters

The Commission's approval, published under reference IP/26/1663, requires Paramount to sever its European film distribution relationship with Universal. Paramount and Universal jointly operate Universal International Pictures (UIP), a distribution venture that handles the release of their films in markets outside the US. The Commission determined that combining Paramount's share of UIP with Warner Bros. Discovery's film catalog would give the merged company an unfair competitive advantage in Europe. European Commission

Under the remedies, Paramount must withdraw from UIP within 13 months of the transaction closing. Additionally, Paramount has committed not to co-distribute films with Universal, directly or indirectly, for a period of ten years. Engadget

The EU review moved quickly. Paramount Skydance sought EU antitrust approval on or around June 2, 2026, and submitted remedies to address competition concerns roughly a month later, on or around July 1. The deal also underwent review under the EU Foreign Subsidies Regulation, which targets unfair state aid from non-EU governments. That review carried a decision 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 subsequently amended its all-cash tender offer to $30 per share for all outstanding WBD shares on June 30. The deal has its roots in 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 path is now clear, 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 the merger. A judge placed a two-week hold on the transaction on July 20, and a hearing is scheduled for August 3 to determine whether the state lawsuit warrants a full trial. Engadget

UK regulators have also signaled a willingness to intervene in the deal, adding a further layer of uncertainty. Reuters

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

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

There is also a competitive dimension worth noting. A proxy solicitation was filed with the SEC in February 2026 opposing a proposed acquisition of Warner Bros. Discovery by Netflix, framing Paramount's bid as the superior alternative. 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, combining content portfolios that span theatrical distribution, streaming, and linear television. The EU's targeted remedy on UIP speaks to a specific concern: that combining Paramount's and Warner's film slates under a single European distribution channel, amplified by an existing joint venture with a competitor, could foreclose rival distributors from accessing theatrical release windows on competitive terms.

The ten-year prohibition on Paramount-Universal co-distribution is a notably long behavioral remedy. The Commission typically prefers structural fixes, meaning the permanent sale or separation of a business asset, and the 13-month UIP exit window effectively functions as one. But the decade-long ban on any co-distribution arrangement with Universal goes beyond a clean break and suggests the Commission wanted to prevent the parties from reconstituting the relationship in a different form.

For Paramount, the path forward now hinges on three jurisdictions. The EU is settled. The US DOJ has cleared the deal. But the 12-state lawsuit, the UK's signaled intent to intervene, and the September closing deadline create a narrow and unforgiving timeline. The August 3 hearing will be the next decisive moment.