A coalition of 12 US states has sued to block Paramount Skydance's proposed $110 billion acquisition of Warner Bros Discovery.
The states argue the merger would reduce competition and give the combined company greater control over film distribution and television licensing.
Paramount has rejected the claims and said it will defend the transaction in court.
A group of 12 US states has filed a lawsuit seeking to block Paramount Skydance Corp.'s proposed $110 billion acquisition of Warner Bros Discovery, arguing that the deal would reduce competition and leave consumers with fewer choices and higher prices, according to a Bloomberg report.
The antitrust lawsuit was filed in a federal court in California by the state's attorney general along with 11 other Democratic-led states. The challenge comes after the US Department of Justice (DOJ) cleared the proposed merger without imposing any conditions in June.
4 July 2026
Get the latest issue of Outlook Business
Paramount has denied the allegations, calling the lawsuit "wrong on the facts and the law". The company said it would vigorously defend the transaction, adding that the merger would allow it to invest more in premium content, theatrical releases and creative talent.
States Raise Competition Concerns
According to the report, the states argue that the merger would combine two of Hollywood's biggest studios, giving the merged company a significant share of the US theatrical film market.
The lawsuit also claims the deal would strengthen the company's position in the television market by combining major cable networks across news, sports, entertainment and lifestyle programming, reducing competition for distributors and consumers.
California Attorney General Rob Bonta said the proposed merger would reduce competition, increase prices and lead to fewer movies and television shows being produced each year.
Deal Faces Fresh Uncertainty
The lawsuit is expected to create a major hurdle for the transaction and could delay its completion beyond September, Bloomberg reported. If the merger is delayed, Paramount may have to pay fees to Warner Bros Discovery shareholders under the terms of the agreement.
According to the report, the states have asked Paramount and Warner Bros Discovery to postpone closing the transaction until the court decides whether the merger can proceed. If the companies refuse, they plan to seek a court order to temporarily block the deal.
Paramount has previously said it does not expect to close the transaction before July 22, when European regulators are scheduled to announce their decision on the proposed merger.
