Investing.com -- Paramount Skydance Corp (NASDAQ:PSKY) is prepared to divest some of its children’s television network assets in an effort to secure European Union approval for its $110 billion acquisition of Warner Bros Discovery Inc (NASDAQ:WBD). The media conglomerate is hoping to avoid any asset sales but remains open to sacrificing specific kids channels if European regulators flag antitrust concerns, according to reporting from Bloomberg, citing people familiar with the matter.
The European Commission faces an initial July 7 deadline to either clear the blockbuster transaction or launch an in-depth review. Regulators are closely examining the overlap between Paramount’s Nickelodeon and Warner Bros. Discovery’s Cartoon Network, which represent two of the most prominent children's TV channels.
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European officials are also scrutinizing how the combined entity might impact the movie theater industry. Commission investigators have recently questioned cinema operators regarding theatrical release windows and how the merger could affect their business model.
If Paramount decides to formally offer concessions to appease the EU, it must submit those remedies by the beginning of July. Failing to satisfy initial antitrust concerns could push the deal into a secondary phase 2 probe, delaying a final decision by at least three months.
Beyond continental Europe, the transaction faces additional regulatory hurdles in the United Kingdom. The UK’s Competition and Markets Authority is preparing its own initial investigation following intense pressure from local film-industry groups and labor unions.
While federal antitrust regulators in the United States appear positioned to clear the takeover, significant domestic opposition is emerging at the state level. A coalition of about 10 states, led by California, is currently drafting a legal complaint to block the multi-billion-dollar merger on antitrust grounds, Bloomberg reported Friday.
State attorneys general are focusing their investigation on how the massive consolidation would alter bargaining power over Hollywood content creators and production staff. Representatives for California's attorney general confirmed the acquisition remains under active investigation but declined to comment on the specific logistics of a potential lawsuit.
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