Paramount’s $110 Billion Warner Takeover Investigated by UK

Britain’s merger watchdog has opened a probe into Paramount Skydance Corp.’s $110 billion takeover of Warner Bros. Discovery Inc.

The Competition and Markets Authority set an initial deadline of Aug. 7 to rule on the deal to unite two Hollywood studios behind films from Casablanca and Harry Potter to Mission: Impossible; two major news networks in CNN and CBS; the streaming powerhouse HBO and dozens of cable networks.

While the move was expected, the London-based agency has come under pressure from public-interest groups, unions and film-industry groups to take a tough stance on the takeover.

“The film and TV industries contribute billions to our economy, so it’s important we assess whether deals between studios may harm competition,” the CMA said.

The UK’s scrutiny is one of the last hurdles Paramount Chief Executive Officer David Ellison must overcome after outmaneuvering rival suitor Netflix Inc. with multiple bids over more than five months. Officials also visited Washington for meetings with shareholders and President Donald Trump and the personal backing of his billionaire father Larry Ellison.

The deal, if approved by regulators, would give the Ellison family control of one of the most powerful media empires in the world.

An initial investigation from the UK’s CMA gives the agency 40 days to decide whether a merger raises any competition concerns. After that, companies can offer remedies to allay those fears, if that’s not enough then an in-depth probe will begin lasting 24 weeks.

The European Union’s antitrust authority has already set a July 7 deadline to rule on the tie-up, and Paramount is open to selling some children’s TV assets, if necessary, to clinch approval in the 27-nation bloc, people familiar with the deal said last week.

Meanwhile, Paramount has submitted suggested terms to resolve an antitrust investigation by California and other states into the transaction, Bloomberg has reported.

A Paramount spokesperson said the CMA move was expected and that the company will will continue to work constructively with the regulator.

Read More: Paramount Offers Concessions to Avoid States’ Antitrust Suit