$110 billion Warner Bros. deal hits legal roadblock as Paramount pauses takeover
David Ellison, CEO of Paramount Skydance, speaks during the Paramount Pictures presentation at CinemaCon, the official convention of Cinema United, in Las Vegas, Nevada, U.S., April 16, 2026. PHOTO | REUTERS
Paramount Skydance has agreed to delay its planned acquisition of Warner Bros. Discovery until a court rules on a legal challenge brought by several US states, adding fresh uncertainty to the proposed $110 billion deal.
The agreement means the merger will not proceed until June next year at the latest, while a case filed by California and 11 other states is heard. The states argue that the takeover could create a media giant with excessive influence over film and television markets, potentially leading to higher prices for consumers.
Paramount said it remained confident in the deal and looked forward to presenting its case in court.
The delay could come at a significant cost for Paramount, which may have to pay up to $1.7 billion in additional fees to Warner Bros. Discovery shareholders if the merger is not completed by the deadline. The company faces a daily charge of $7 million if the transaction does not close by September 30.
The legal challenge threatens Paramount CEO David Ellison’s plan to expand the company into a stronger competitor to streaming giants such as Netflix and Disney.
Shares in Paramount fell 3.3 per cent on Friday and have declined 37 per cent this year.
