Paramount Delays $110 Billion Merger with Warner Bros. Discovery
Paramount agreed to delay its merger with Warner Bros. Discovery.
The deal is now delayed until June 2027. The $110 billion merger delay came after lawsuits challenged it.
Twelve states filed one lawsuit against the deal. They argued the merger would harm the US entertainment industry.
The Writers Guild of America filed a separate lawsuit too. A federal judge named Araceli Martínez-Olguín had already ordered a temporary block this week.
Then Paramount agreed to the voluntary delay. Paramount must now pay a penalty for each day the deal misses a September 30 deadline.
This could cost the company millions of dollars. Paramount will also owe Warner Bros.
Discovery shareholders a fee of 25 cents per share each quarter. That fee starts September 30.
It could add up to about $1.7 billion if the deal is delayed to June 2027. Paramount would owe a $7 billion breakup fee if the deal collapses completely.
The Justice Department's antitrust division already cleared the merger in June. The deal should close by June 2027 or five days after a court ruling.
Key Terms 3
- antitrust division US government group that checks if mergers harm fair business competition
- breakup fee Money one company pays if a merger deal falls apart
- ticking fee A fee that grows over time until a deal is completed