UK may intervene in US$110 billion deal between Paramount and Warner
The UK is inclined to intervene in the proposed $110 billion acquisition of Warner Bros. Discovery by Paramount Skydance, citing concerns about the impact on press freedom and the provision of on-demand programming.
In the United Kingdom, the expression "inclined to" is used by government officials to announce that they will take action before beginning the legal procedures to do so.
The measure is the first step in a process that could lead to the deal being referred to the country's antitrust regulator, which gained prominence in 2023 when it blocked the acquisition, worth US$69 billion, of Activision Blizzard - creator of the "Call of Duty" franchise - by Microsoft, which sparked outrage from the two American companies. The agency later changed its decision after Microsoft changed the acquisition plan.
The United Kingdom's possible intervention comes at a time when the global agreement has already been approved by the United States, China, Australia, Germany, France and Saudi Arabia.
Culture Minister Lisa Nandy, who set a July 6 deadline for companies to respond, said in a statement that she "is aware of the need to reach a final decision in a timely manner and will strive to do so appropriately."
Nandy pointed out that although the agreement is global in nature, it would impact British assets. Paramount owns the UK's Channel 5, a free-to-air TV station that broadcasts news programs, while Warner owns CNN.
Other UK companies that could be affected include TNT Sports, Cartoon Network, Nickelodeon, as well as Paramount+ and HBO Max.
After the deadline for responses, Nandy will decide whether to issue a formal notification of public interest intervention; if it does so, it will trigger reviews by the British media regulator, Ofcom, and the Competition and Markets Authority.
Regulatory bodies have up to 40 days to submit reports. Once they do, Nandy will decide whether to approve the deal or refer it for further investigation, which could last up to 24 weeks.
If concerns are identified, companies could try to address them by offering corrective measures, such as commitments to protect editorial independence.
In response to Nandy's statement, a Paramount spokesperson responded to CNN. "We appreciate the continued constructive dialogue with all government bodies and relevant authorities, including in the UK. We are confident that the proposed transaction does not present media plurality issues in the UK and we maintain our confidence in the timeline established for closing the deal," he highlighted.
Paramount said it expects the agreement to come into force in the third quarter of this year, that is, by the end of September. Corporate meetings about how to integrate Paramount and WBD have been taking place for months.
CNN reached out to Warner Bros. Discovery for a comment.
*With information from CNN Internacional
Source: CNN