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The European Commission on Wednesday approved Paramount Skydance's roughly $110 billion acquisition of Warner Bros. Discovery, clearing one of the most sweeping media consolidations in Hollywood history, on the condition that Paramount dissolves its long-standing film distribution partnership with Universal Pictures across much of Europe.
The conditional green light removes a major regulatory hurdle for David Ellison, the Skydance Media chief executive who has steered the deal, and brings the two studios closer to completing a combination that would unite franchises spanning from Batman and HBO to the Godfather films, SpongeBob SquarePants, and DC Studios.
The Commission said it found no significant competition problems at the level of film production, where rivals including Disney, Sony, Amazon MGM, A24, and Lionsgate, alongside European studios, remain as viable competitors across the European Economic Area.
Its chief concern lay elsewhere: in how films actually reach cinema screens.
At the heart of the EU's worries was United International Pictures, a joint venture that Paramount and Universal have operated since 1981 to distribute their films theatrically outside the United States and Canada.
The London-based venture, which handles theatrical releases across a swathe of European markets, would have effectively absorbed Warner's film slate following the merger, concentrating the distribution of three major studios' content within a single commercial arrangement.
Regulators concluded that this would have given cinema operators worse rental and distribution terms, with the costs ultimately passed on to consumers.
The Commission determined that adding Warner's portfolio to UIP, without remedies, would have produced high market concentration and increased commercial transparency among competing studios in the countries where the joint venture operates, which include Bulgaria, Croatia, Denmark, Finland, Greece, Hungary, Poland, Portugal, Romania, and Sweden, among others.
To secure clearance, Paramount agreed to exit UIP entirely within 13 months of the transaction closing.
Beyond the divestiture, the company accepted a ten-year prohibition on entering any agreement with Universal to jointly co-distribute films in the EEA.
It also committed not to shift Warner's existing distribution arrangements, or its own, in UIP countries to a distributor that also handles Universal's or Disney's films, a condition designed to prevent the competition concerns from resurfacing through the back door.
The Commission said a market test of the proposed remedies drew positive feedback, and it concluded that the transaction, as modified, no longer raised competition concerns.
An independent trustee will oversee compliance under Commission supervision.
On the audiovisual side, the Commission found that sufficient alternative competitors, including streaming platforms offering children's content, would continue to exert competitive pressure on the merged entity's pay-TV channels.
The deal's path to Brussels was not straightforward. Warner shareholders approved Paramount's offer of $31 per share in April 2026, after Netflix withdrew from a competing bid in February of that year, having declined to match Paramount's revised terms.
The U.S. Department of Justice cleared the merger the following month. Factoring in Warner's debt load, the total value of the transaction comes to more than $110 billion.
The transaction was notified to the European Commission on June 2, 2026, and was handled as a Phase I review with commitments, a process that, under EU merger rules, extends the standard 25-working-day review period by ten additional days.
The Commission retains authority under the EU Merger Regulation to assess deals involving companies whose turnover exceeds specified thresholds and to block any concentration that would significantly impede effective competition within the bloc.
The deal still faces additional regulatory hurdles and ongoing litigation in other jurisdictions before it can close.
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