JAKARTA - The merger plan of Paramount Skydance and Warner Bros. Discovery is not yet safe. Citing an NBC News report, Friday, June 12, the European Union regulator is reviewing the funding support from three Middle Eastern state investment institutions behind the US$110 billion large transaction.
The European Commission will decide by Sunday at the latest whether to approve the merger or open a full investigation. If approved, the two old Hollywood studios will be under one roof. The impact could be huge for the map of the American entertainment industry.
Paramount previously agreed to buy Warner in February. The company asked for EU approval under foreign subsidy rules. These rules are used to assess whether funding support from outside the EU can interfere with business competition.
In a document to the United States capital market authority quoted by NBC News, Paramount said the acquisition of Warner was supported by the Public Investment Fund of Saudi Arabia, L'IMAD Holding of Abu Dhabi, and the Qatar Investment Authority.
The three Gulf sovereign wealth funds are said to have injected around US$24 billion. Sovereign wealth funds are government-owned investment institutions that manage state assets for long-term economic purposes.
Paramount said the merged company would remain under the control of the families of Paramount CEO Skydance David Ellison and RedBird Capital Partners, an American investment firm.
However, the spotlight is not only coming from Europe. California Attorney General Rob Bonta and British antitrust authorities are also investigating the transaction. In the United States, the merger still requires the official approval of the Department of Justice.
"Paramount/Warner Bros is not a final deal," Bonta said in a post on X in late February. He emphasized that the two Hollywood giants had not passed the regulator's examination.
Rejection also came from the entertainment workers. As reported by NBC News, in an open letter in April, more than 1,000 actors, directors, producers, and writers said the merger would make the media industry more concentrated and reduce competition.
David Ellison promised to preserve the legacy of the two iconic companies while building a new generation of media and entertainment companies. Ellison, 43, is the son of Larry Ellison, founder of Oracle and an ally of President Donald Trump.
Paramount owns the 114-year-old film studio, streaming service Paramount+, and the CBS network. Warner has a 116-year-old film studio, HBO Max, as well as cable channels such as CNN.
The merger plan still has to pass a number of regulatory checks in the European Union, the United Kingdom, California, and the United States Department of Justice before it can actually go ahead.
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