Paramount’s $110bn takeover of Warner Bros Discovery has been approved by antitrust regulators at the US Justice Department.
The approval follows a recent meeting between regulators and Paramount CEO David Ellison who has publicly committed to continue giving movies from both studios cinema releases and to selling content to rivals and 3rd party outlets.
In April WBD shareholders “overwhelmingly” approved Paramount’s offer for the firm which ended a months-long battle to oust Netflix as the Warner Bros board’s preferred suitor.
WBD’s portfolio of studios, franchises and outlets include the Warner Bros studio, HBO, HBO Max, DC Studios, CNN, TNT Sports, Eurosport, Lord of the Rings, Dune, The Big Bang Theory, Game of Thrones and TT Games.
Assuming final conclusion of the tie-up, these will join Paramount’s stable of existing brands which includes Mission Impossible, Star Trek, Transformers, the G.I. Joe film series and Call of Duty.
Ellison has previously said the combined business will have the resources, brands and financing to provide meaningful competition to Netflix, the world’s biggest streaming service.
Critics say the tie-up will result in less opportunities for movie creatives, reduce the number of buyers for content and pitches, and could also push up prices for consumers.
The last of these is predicated on Paramount’s plans to merge the HBO Max streaming service with its own Paramount+.
In recent days the transaction has been given the green light in multiple countries including Australia, New Zealand and Saudi Arabia.
Its final conclusion of the deal is still subject to getting the go-ahead from regulators in the UK, EU and other key markets and could yet face a legal challenge from several Democrat-run US states.
Setting out its reasons for not blocking the deal, the DOJ noted that both WBD and Paramount “are historically late entrants into SVOD with less customers subscribing to Paramount+ and Warner Bros.’ HBO Max and discovery+ offerings, compared to those of the three largest streamers today.”
As a result it concluded that “the combined firm is likely to increase competition by offering consumers a more robust competitive alternative to the larger SVOD offerings.”
It also decided that the “steady decline” of linear television audiences meant the two studios’ combined channel portfolio was not a concern.
And with regards to the production and release of cinema films, it concluded that “the transaction is not likely to harm competition in studio development, production, or distribution of films for theatrical release.”
Responding to the announcement, a Paramount spokesperson said: “We are grateful for the Department of Justice’s thorough review of this transaction, as well as the work of the other agencies that have completed their reviews and provided clearance to date.
“This deal is pro-competitive, resulting in a stronger company better positioned to compete against dominant technology platforms in an industry increasingly defined by intense competition for audiences, talent, technology, and investment.
“We remain focused on completing the transaction as soon as possible and delivering its benefits to consumers, creators, and the entertainment industry as a whole.”