The European Commission has given conditional approval to Paramount Skydance’s $110bn (£85bn) acquisition of Warner Bros Discovery, clearing a major regulatory hurdle for a deal that would create one of the world’s largest media conglomerates. The green light, announced on 22 July 2026, is contingent on Paramount ending its stake in United International Pictures (UIP), a film distribution joint venture with Universal Pictures, within 13 months of closing the transaction. Paramount has also committed not to enter any new film distribution agreement with Universal in the European Economic Area for ten years. The Commission said these commitments “fully address” competition concerns by ensuring that films from the merged entity will not be distributed alongside those of Universal or Disney.

Paramount welcomed the decision as “a major milestone” toward completing the acquisition, arguing that the combination “will enhance consumer choice” and create a business capable of competing with the technology companies that dominate the industry. The European regulator had warned that without remedies, the deal would have led to “worse rental and distribution terms for cinema operators, ultimately disadvantaging consumers” because Warner’s film catalogue would have been added to the existing Paramount-Universal distribution pipeline.

Despite the European approval, the merger remains blocked in the United States. A coalition of 12 states, led by California, filed a lawsuit on 13 July arguing that the tie-up would cause “substantial harm to movie theatres, basic cable distributors, and, ultimately, audiences nationwide”. On 20 July, US District Judge Araceli Martínez-Olguín issued a temporary restraining order pausing the transaction for at least two weeks, ruling that the states had raised “serious questions” about whether the takeover would violate antitrust law. If the deal is not completed by 30 September, Paramount will have to pay Warner Bros shareholders a “ticking fee” of roughly $7m per day, according to multiple sources.

The merger also faces scrutiny in the United Kingdom, where regulators are weighing intervention over concerns about local news, children’s television and streaming competition. The Writers Guild of America has opposed the deal, with its head Tom Fontana warning that the merged company would have “tremendous power to suppress our wages” and “eliminate opportunities for emerging writers”. A preliminary injunction hearing is scheduled for 3 August, at which the judge may decide to extend the pause indefinitely while litigation proceeds.