Paramount has put its merger with Warner Bros. on hold for nearly a year

Paramount Pictures has agreed to suspend its merger with Warner Bros., valued at $110 billion, at least until June 1, 2027—until the legal proceedings brought by the attorneys general of 12 U.S. states and the Writers Guild of America (WGA) are concluded. They are seeking to block the deal, arguing that the merger will significantly reduce competition in the entertainment market.

According to court documents, the companies have agreed not to close the deal or take any steps to integrate or merge their businesses until five days after the court’s ruling—or until June 1, 2027—if the court proceedings are not concluded earlier. By July 31, the parties must submit a joint statement outlining the schedule for further proceedings in the case.

A Paramount spokesperson called the decision to put the deal on hold a “significant victory,” according to the Financial Times. Paramount has been pushing from the outset for the case to move quickly to a hearing on the merits, a company spokesperson said in a statement to TheWrap.

“This is the fastest and clearest way to prove that this deal is beneficial for competition, consumers, and content creators, ” he noted, adding that “the market definitions proposed by the plaintiffs have nothing to do with the realities of today’s media market and do not stand up to scrutiny.” “We look forward to proving our case in court,” added a Paramount spokesperson.

Following this news, Paramount shares fell 4% in after-hours trading, but then recovered and, at the time of publication, were virtually unchanged from Friday’s closing price—on that day, they had lost 3.3%. Warner Bros. shares fell 0.2% in after-hours trading.

An agreement to put the Paramount-Warner Bros. merger on hold was reached after attorneys general from 12 U.S. states secured a temporary injunction earlier this week to block the deal from closing. The court later extended the restrictions for another 28 days, until August 17.

Prosecutors from 12 states have filed a lawsuit to block Warner Bros.' acquisition of Paramount, arguing that the deal could weaken competition among blockbuster producers, distributors, and cable TV networks.

Under the terms of the merger agreement that Paramount and Warner Bros. signed in February, Paramount has until June 4, 2027, to complete the acquisition. However, if the deal is not completed by September 30, 2026, the studio will be required to pay Warner Bros. shareholders a fee of $0.25 per share for each calendar day of the “delay,” or about $7 million per day.

This article was AI-translated and verified by a human editor