Britain’s competition watchdog has opened the first public step in its review of Paramount Skydance’s proposed $110 billion takeover of Warner Bros. Discovery, asking interested parties for views before a formal Phase 1 investigation that the regulator says it expects to launch in the coming weeks. The Competition and Markets Authority published its invitation on April 13 and set an April 27 deadline for submissions, saying it wants initial evidence on how the deal could affect competition in the U.K.’s film and television sectors.
The move adds fresh pressure to a transaction already facing scrutiny on several fronts. Warner shareholders are scheduled to vote on April 23, and proxy adviser Glass Lewis has urged investors to back the merger, arguing that Paramount’s cash offer compares well with the abandoned Netflix path. At the same time, Glass Lewis told shareholders to reject golden-parachute payouts that could send chief executive David Zaslav as much as $887 million, citing serious concerns about late changes to the compensation package.
Paramount has spent recent weeks trying to show momentum. On April 9, the company said it had syndicated its bridge loan and secured permanent financing from 18 banks, trimming its debt commitments to $49 billion from $54 billion. Paramount chief strategy officer Andy Gordon called the financing package an important milestone, and the company continues to tell regulators and investors that the combined group would keep Paramount and Warner operating as separate studios, release at least 30 films a year, preserve full theatrical windows and keep HBO running independently.
Critics of the deal say those assurances do little to calm fears about consolidation. More than 1,000 filmmakers, actors and industry workers signed an open letter on April 13 warning that the merger would shrink competition, cut jobs and narrow the range of stories that get financed and distributed. Ross Benes, a senior analyst at Emarketer, said the letter helps organize resistance, though he added that the letter alone is unlikely to kill the transaction.
The U.K. review also lands as California presses its own examination. State Attorney General Rob Bonta has said his office is already investigating the deal, while TD Cowen analysts wrote in February that state intervention was “very likely.” Paramount says the transaction is pro-competitive and that it is engaging constructively with regulators around the world.
