Paramounts $108bn bid for Warner Bros clears US antitrust hurdle
Unlock the White House Watch newsletter for free Your guide to what Trump’s second term means for Washington, business and the world Paramount Skydance’s $108bn bid to gatecrash Netflix’s deal for Warner Bros Discovery has cleared a key US antitrust hurdle, in a signal of support from the Trump administration. The media group, whose bid…
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Paramount Skydance’s $108bn bid to gatecrash Netflix’s deal for Warner Bros Discovery has cleared a key US antitrust hurdle, in a signal of support from the Trump administration.
The media group, whose bid is bankrolled by Oracle billionaire and Donald Trump donor Larry Ellison, said on Friday that its deal had complied with the US Department of Justice’s second request review process, removing a critical impediment to US regulatory approval.
By allowing the 10-day statutory waiting period to elapse under the Hart-Scott-Rodino Act’s second request process, the DoJ is in effect waving through the Paramount deal on antitrust grounds.
“The expiration of the HSR waiting period means there is no statutory impediment in the US to closing Paramount’s proposed acquisition of WBD,” said Paramount in a regulatory filing.
The swift antitrust clearance will probably be seen in the industry as a signal of support from the White House. It comes as allies of the president expand their sway across the US media landscape.
The contrast with the scrutiny facing Netflix’s bid may also reinforce perceptions that the administration is putting its thumb on the scale.
However, the expiry of the HSR waiting period does not amount to formal approval, and does not preclude the government from suing to block a transaction at a later stage.
US agencies have in recent years challenged deals ranging from JetBlue’s proposed acquisition of Spirit Airlines to UnitedHealth’s purchase of Amedisys after the HSR process had run its course.
Paramount also still needs to convince WBD’s board and shareholders of the merits of its deal.
But the antitrust clearance will be a boon for Paramount as it reopens talks with WBD in an attempt to trump Netflix’s deal. WBD this week gave Paramount a seven-day period ending on February 23 to “make its best and final offer” or walk away.
Netflix, meanwhile, is facing an early-stage review by the DoJ to assess whether its $83bn deal to buy WBD would stifle competition. The DoJ is yet to sue to block Netflix’s deal, the most drastic step.
“Paramount Skydance continues to mislead stockholders and distract from the facts,” David Hyman, Netflix’s chief legal officer, said on Friday. “Routine HSR milestones do not signal DoJ approval nor that any decision has been made.”
Bill Rinner, now a Latham & Watkins lawyer advising Paramount and until recently a senior official in the DoJ’s antitrust division, said in a speech last year that some “mistakenly believe” the lapse of the waiting period constituted clearance.
Paramount and Netflix’s bids are expected to face more intense competition scrutiny in foreign jurisdictions, such as the UK and EU. Paramount said in its filing that it continued to “engage constructively with antitrust enforcers and other regulators around the world”.
Both companies have been jostling to win the favour of Trump. Paramount’s chief executive David Ellison met the US president earlier this month, according to people familiar with the matter. Netflix’s co-chief executive said on a podcast appearance this week that Trump was personally concerned about the impact of the Netflix deal on jobs in California.
Paramount’s proposed deal has drawn scrutiny from Democratic lawmakers. Senators including Cory Booker, Elizabeth Warren, Chuck Schumer and Dick Durbin on Thursday sent Ellison a letter requesting Paramount preserve all records linked to the deal, after the company’s chief declined to testify before Congress while Netflix and Warner executives were in attendance.
We “can assure you that [the deal] raises significant competition concerns that the Senate has not had an opportunity to examine”, the senators wrote. “The pattern of evasion, combined with Paramount’s apparent confidence that a politically sensitive transaction will clear without difficulty, warrants serious scrutiny.”
WBD and the justice department declined to comment.
The move by the DoJ is reminiscent of the Federal Trade Commission’s decision to approve Pfizer’s deal to buy weight-loss drug developer Metsera in the midst of a public bidding war with Novo Nordisk for the biotech. Pfizer ultimately prevailed with a higher bid.
