Paramount and Warner Bros ordered to pause mega-merger

Federal judge issues ruling after a California-led coalition of states argued the US$110 billion deal would irreparably harm competition. A federal judge in California on Monday ordered Paramount Skydance and Warner Bros Discovery to temporarily pause their merger while a case brought by multiple states challenging the deal moves forward. The companies are prohibited from closing their US$110 billion deal for 14 days until another hearing is held on August 3 regarding a preliminary injunction, which would prevent Paramount and Warner Bros from closing the transaction before a final decision is reached. The states raised 'serious questions' about the deal's potential to be anticompetitive, the judge said in her ruling, adding that 'the balance of equities and public interest tip sharply in favour of the Plaintiff States'. Last week, 12 states led by California sued to block the deal in a direct challenge to the Trump administration's Justice Department, which approved the merger last month. In a statement on Monday, California Attorney General Rob Bonta hailed the temporary restraining order as 'a critical first win in our case to ensure this mega-merger never sees the light of day'. A Paramount spokesperson told Variety magazine that the company is 'grateful for the Court's swift order' and underlined that it 'preserves the status quo while the Court considers the antitrust issues presented'. The combined company - which came about after Netflix bowed out of the battle to buy Warner Brothers - would control a sprawling roster of assets, including CNN, Warner Bros Pictures and the HBO Max streaming service. In their complaint, the states claim the combined company would control roughly 27 per cent of wide-release theatrical film distribution and a similar percentage of basic cable channel licensing. The saga has become politically charged, with US President Donald Trump publicly saying he would weigh in on the deal as the fate of CNN - a frequent target of the president's ire - hangs in the balance. The Trump administration approved the blockbuster deal on June 12 without demanding a single change. It was a major win for media mogul David Ellison - his father, Oracle co-founder Larry Ellison, largely financed the takeover and is a Trump ally.