A '148 trillion won media giant' nears birth as Paramount approaches U.S. antitrust settlement

[Financial News] Paramount Skydance is in the final stages of negotiations to settle antitrust litigation with California and other U.S. states that have blocked its acquisition of Warner Bros. Discovery (WBD). If a settlement is reached, the company will clear the biggest hurdle standing in the way of creating a media giant valued at up to $111 billion, or approximately 148 trillion won.
According to The Wall Street Journal (WSJ), the Financial Times (FT) and other foreign media outlets on the 19th (local time), Paramount is holding intensive discussions with authorities in 12 Democratic-leaning states over a settlement of the antitrust litigation. Led by California Attorney General Rob Bonta, the states and the Writers Guild of America (WGA) filed a lawsuit in July seeking to block the merger, warning that it could create a monopoly in the film and cable television markets. The acquisition process has effectively been halted.
Paramount is rushing to reach a settlement because of mounting pressure from enormous delay payments. Under the terms of the agreement, Paramount must pay WBD shareholders $7 million per day, or $650 million per quarter, from next month until the merger is completed. The company has also applied heavy pressure on state authorities, warning that it would leave California and move its headquarters to Tennessee or another state starting on the first day of next month if no agreement is reached.
The two sides are currently exchanging various compromise proposals. Paramount has reportedly proposed keeping the two companies' film studios separate for a certain period rather than integrating them immediately. It has also suggested guaranteeing the theatrical release of 30 films annually to protect the movie theater industry. Bonta's side, however, is seeking stronger structural changes, such as asset sales, rather than behavioral remedies. The possibility of a breakdown in the final negotiations therefore remains.
If the deal goes through, Paramount CEO David Ellison would gain control of WBD's powerful franchises, including Harry Potter and DC Comics, as well as CNN, Cartoon Network and HBO Max. These assets would join Paramount's existing MTV, Comedy Central and CBS broadcast network, completely reshaping the entertainment industry.
The merger process is already progressing smoothly outside the United States. Regulatory approval has been secured in approximately 70 jurisdictions, including the United Kingdom and Mexico. Paramount also recently obtained Federal Communications Commission (FCC) approval for a 49.5% equity investment by a Middle Eastern sovereign wealth fund. After reports emerged that Paramount was nearing an antitrust settlement, WBD shares surged 8.2% in after-hours trading. 

[email protected] Park Ji-hyun Reporter