US clears Paramount’s US$111bil Warner Bros takeover

LOS ANGELES: The US justice department on Friday cleared Paramount Skydance’s US$111 billion takeover of Warner Bros. Discovery, handing a major win to a media empire financed by one of President Donald Trump’s closest billionaire allies.

The Antitrust Division approved the blockbuster deal without demanding a single change, capping an eight-month review and clearing the way for one of the largest media mergers in years.

It said the tie-up was “not likely to result in harm to competition or American consumers” – and could even increase competition.

The approval is a coup for Paramount chief executive David Ellison, whose father, Oracle co-founder Larry Ellison, largely financed the takeover.

The elder Ellison, one of the world’s richest men, is a close ally of Trump.

A group of Democratic senators led by Elizabeth Warren had warned that a Warner Bros. deal risked being “tainted by political favouritism and corruption”, urging the justice department to review it on the law and facts.

Larry Ellison’s financial guarantee was what finally won over the Warner Bros board, sealing Paramount’s victory in a bruising bidding war with Netflix.

The combined company will control a sprawling roster of assets, including CNN, Warner Bros. Pictures and the HBO Max streaming service.

But the federal sign-off does not end the deal’s legal peril.

A coalition of about 10 states led by California is preparing an antitrust lawsuit that could land this month, Bloomberg has reported.

California Attorney General Rob Bonta’s office said this week the acquisition “remains an active investigation”. The European Commission is reviewing the merger as well.

Hollywood is uneasy about the deal.

Hundreds of actors and directors have signed a letter opposing the merger, warning it will choke production in an industry already battered by years of consolidation and cost-cutting.

The justice department pushed back on those fears directly, arguing the evidence did not show the merger would shrink output.

The saga began last year, when streaming giants Netflix and Paramount went to war over Warner Bros and its prized back catalogue.

A wary Tinseltown reluctantly lined up behind Netflix as the lesser of two evils, only to watch Paramount keep raising its bid until the streamer walked away.