US Justice Department Approves Paramount-Skydance Warner Bros. Discovery Deal

The U.S. Justice Department has approved Paramount Skydance Corp's massive $110 billion acquisition of Warner Bros. Discovery. This regulatory green light comes as several states prepare to challenge the deal in court. Paramount argues the merger will boost competition.

However, concerns persist within Hollywood regarding job losses and storytelling diversity.

The U.S. Justice Department's Antitrust Division said it has cleared Paramount Skydance Corp's planned $110 billion acquisition of Warner Bros. Discovery. Department of Justice officials said in a statement released late on Friday that it determined the transaction did not pose a threat to competition in streaming, the traditional television business or film.

The clearance gives Paramount another regulatory green light to point to as it seeks to ward off a potential challenge to the deal by states. In April, Paramount also asked the Federal Communications Commission (FCC) to approve foreign investments backing the acquisition.

Also read: Paramount, Warner Bros deal under EU subsidy scrutiny, decision due July 14

U.S. senators have raised concerns about Middle Eastern sovereign wealth funds and Chinese companies taking part. The FCC has yet to make a determination. Analysts had expected the DOJ not to challenge the deal because of Paramount's political connections.

Paramount CEO David Ellison's father, billionaire Oracle co-founder Larry Ellison, has cultivated ties with President Donald Trump, and the company has hired former Trump officials.

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Assistant Attorney General Omeed Assefi had said that politics would "absolutely not" drive the DOJ's review of the transaction.

Also read: ‘Main Street vs The Merger’: Hollywood workers rally against $110 bn Paramount-Warner deal

Paramount has argued the deal has no antitrust problems, and said the combined company would increase competitive pressure on Disney and Netflix.

However, several in Hollywood - including actors, directors, writers and producers - have expressed concern that the merger would result in fewer jobs and less diversity of storytelling. California, New York and other U.S. states are preparing a lawsuit to block the deal, sources familiar with the matter told Reuters last week.