The completion of Warner Bros. Discovery‘s merger with Paramount has been delayed after a California judge granted a temporary restraining order, putting the deal on hold for at least 14 days.
The restraining order follows a lawsuit filed last week by a coalition of U.S. state attorneys general, including representatives from California, Nevada, Massachusetts, New York and New Jersey. The lawsuit argues that the proposed merger would violate longstanding antitrust laws by reducing competition.
According to CNBC, the temporary restraining order was requested after Paramount indicated the transaction could be completed as early as this week. The legal challenge could also result in a further injunction that would delay the merger beyond the initial two-week period.
Paramount defended the proposed merger in a statement, insisting the transaction is lawful and would benefit consumers, creators, workers and the wider entertainment industry. Warner Bros. Discovery has not publicly commented on the latest legal development.
Warner Bros. Discovery/Paramount Merger Delay Could Lead To Major Financial Implications
The delay could have financial implications if the merger is not completed by the end of September. Under the terms of the agreement, Warner Bros. Discovery shareholders would receive an additional 25 cents per share each quarter until the transaction closes. Should the merger ultimately fail because of regulatory issues, Paramount has agreed to pay Warner Bros. Discovery a $7 billion termination fee.
The merger has also drawn attention within the wrestling industry due to AEW’s media rights partnership with Warner Bros. Discovery. AEW’s current agreement runs through 2027 and includes a one-year extension option held by WBD. AEW President Tony Khan has previously spoken positively about Paramount Skydance CEO David Ellison and the company’s future relationship with AEW.
