Paramount May Sell Universal Pictures JV Amid EU Scrutiny of Warner Bros Deal
By Foo Yun Chee
Paramount's Strategic Moves to Address Regulatory Concerns
EU Antitrust Review and Paramount's Divestment Offer
BRUSSELS, June 24 (Reuters) - Paramount Skydance Corp is prepared to divest its film distribution joint venture with Universal Pictures to address EU antitrust concerns about its $110 billion acquisition of Warner Bros Discovery, a person familiar with the matter said on Wednesday.
The offer, which follows a meeting with the European Union's antitrust regulators on Tuesday, will be submitted next Tuesday, the person said.
Extension of EU Review Deadline
That would extend the European Commission's preliminary July 7 deadline for the review by 10 working days to July 21.
Previous Regulatory Approvals and Market Reactions
Initial EU Approval Expectations
Reuters exclusively reported in February that the deal would easily secure EU approval, with Paramount willing to sell minor channels such as its children's brands if required. This is now off the table as there were no issues on that front, the source said.
Concerns from European Cinema Operators
Divesting the film distribution joint venture with Universal Pictures could ease worries expressed by European cinema operators.
Paramount's Official Response
A spokesperson for Paramount said the company does not comment on ongoing regulatory proceedings.
Additional Regulatory Scrutiny and Global Implications
EU Foreign Subsidies Regulation Review
The deal is also being assessed in a separate proceeding under the EU Foreign Subsidies Regulation, because Saudi Arabia's Public Investment Fund, Abu Dhabi's L'imad Holding Company and the Qatar Investment Authority are bankrolling the bid. Paramount is expected to win unconditional approval for this.
U.S. Regulatory and Legal Developments
The U.S. Justice Department cleared the acquisition last week, saying it was unlikely to harm competition or consumers.
State-Level Legal Challenges in the U.S.
California, New York and other U.S. states are preparing a lawsuit to block the deal, sources familiar with the matter have told Reuters.
(Reporting by Foo Yun Chee, editing by Milla Nissi-Prussak)
