Paramount’s acquisition of Warner Bros. Discovery took a closer step to becoming reality this week when the European Commission approved the merger.
The European Commission reportedly approved the $111 billion deal on the condition that Paramount cancels its film distribution partnership with Universal in Europe over the next 13 months, per Variety. Ultimately, the European Commission found that the deal would not harm TV or film production in Europe, leaving enough global and local competitors.
The commission’s investigators did flag that the film distribution market would become overly concentrated due to Paramount’s longstanding joint venture with Universal, which goes under the name United International Pictures.
Paramount met with European regulators and agreed to exit the partnership, and not to enter into a similar arrangement for at least a decade.
The United Kingdom is still considering whether to intervene in the deal. Paramount has already received approvals from some 20 other countries, including Australia and China, as well as the U.S. Department of Justice.
The European Commission said in a statement that Paramount’s stated commitments “fully address the competition concerns identified by the Commission by ensuring that the films of the merged entity will not be distributed jointly with those of Universal or Disney.”
Paramount chief legal officer Makan Delrahim praised the deal in a statement on Wednesday, hailing it as another “significant milestone.”
“Not only does this combination not pose any competitive harms, it actually enhances competition by creating a scaled media and entertainment company with the ability to truly challenge the tech platforms that have come to dominate the industry,” said Delrahim. “By strengthening competition it will support increased investment in content, expand opportunities for creatives and deliver greater choice for consumers.”
The merger still faces several legal hurdles here in the United States, with a judge on Monday temporarily halting the deal as a state coalition determines if it will violate anti-trust laws. The Writers Guild of America (WGA) has also filed a lawsuit claiming that the merger would stifle job growth.