A federal judge in Oakland (California), seized for interim relief, ordered Monday, July 20, the suspension of the takeover of the media group Warner Bros Discovery (WBD) by its competitor Paramount Skydance, the time to examine the case on its merits, according to a document in the file.
Prosecutors from twelve American states, led by California, are challenging this takeover, valuing WBD at $110 billion, including debt, arguing that the combination of the two companies would present a risk to free competition and consumers.
“The States (at the origin of the procedure) present solid elements according to which the transaction will weaken competition in a substantial manner,” writes Judge Aracelli Martinez-Olguin in her decision. The magistrate also considered that the group of prosecutors had “demonstrated” that the union of the two groups “would lead to irreversible damage” if it were implemented before the case was decided on its merits.
Camouflage for Paramount Skydance
The operation “would be difficult, if not impossible, to unwind (if it were carried out now) given the operational consolidation, the sharing of sensitive information and the reassignment or dismissal of certain employees,” said the judge.
Even if this is a temporary judgment, it nonetheless constitutes a snub for Paramount Skydance, which presented its offer as more likely to be authorized by regulators than that of Netflix. After five months of battle, Netflix finally threw in the towel at the end of February, leaving the field open to Paramount Skydance.
When requested, Paramount Skydance did not immediately respond. “This is a crucial victory,” responded California Attorney Rob Bonta in a statement, “the law is on our side and we look forward to continuing to defend our case.” »
The coalition of prosecutors expects that this merger, if it is completed, will cause price increases, lower quality of content and a lower volume of films and series produced.
