Paramount, Warner Bros Agree To Delay $110 Bn Merger Until June 2027

Paramount Skydance Corp. and Warner Bros. Discovery Inc. have agreed not to close their proposed $110 billion merger until June 2027, unless the legal battle challenging the transaction is resolved earlier, extending uncertainty around one of the biggest media deals in years.

Paramount agreed to delay the transaction through June 2027, according to a court filing on Friday, AFP reported. The agreement comes after a US federal judge temporarily halted the acquisition earlier this week as a coalition of states challenges the deal on antitrust grounds.

The delay comes despite the Trump administration approving the blockbuster transaction on June 12 without requiring any changes. If completed, the combination would reshape the entertainment and media industry and deliver a major win for Paramount's owners, the Ellison family, who are close allies of US President Donald Trump.

The companies have until June 4 to complete the transaction under the merger agreement before either side can walk away. Paramount is expected to seek a trial date that would provide a ruling well before that deadline, while the states have previously sought an April trial.

Delay Could Prove Costly For Paramount

The extended timeline could carry a significant financial cost for Paramount. The company had agreed to pay Warner Bros. shareholders around $7 million per day beginning October 1 until the transaction closes, potentially resulting in more than $1.6 billion in payments.

If the transaction is ultimately abandoned after the deadline, Paramount would owe Warner Bros. another $7 billion, according to Bloomberg.

Both sides are expected to submit their proposed trial schedules by the end of July. Paramount is likely to push for proceedings early enough to secure a decision well ahead of the June deadline.

The legal uncertainty follows a ruling earlier this week by US District Judge Araceli Martínez-Olguín, who temporarily halted the transaction through August 3 while considering whether the merger should remain blocked for the duration of the litigation, according to Reuters.

States Warn Merger Could Hurt Competition

California and 11 other states filed a lawsuit challenging the merger, arguing that combining Paramount Skydance and Warner Bros. Discovery would create a media company with excessive market power across the film and television industry.

Martínez-Olguín said the states had made a "strong showing" that the transaction could violate antitrust law by reducing competition. She also said allowing the companies to complete the merger before the case is resolved could result in changes that would be difficult to reverse, including job cuts and the sharing of commercially sensitive information.

The states have argued that the combined company would control around 27% of the market for widely released films, potentially strengthening its bargaining position with cinema operators and allowing it to demand a larger share of box-office revenue.

The agreement to delay closing until June 2027 effectively keeps the transaction on hold while that antitrust challenge plays out, unless the companies secure an earlier resolution to the legal dispute.