Paramount Skydance Corp (PSKY) is prepared to divest its film distribution joint venture with Universal Pictures to satisfy European Union antitrust regulators reviewing its $110 billion acquisition of Warner Bros. Discovery (WBD), a person familiar with the matter said Wednesday.

The proposed concession signals that Paramount’s landmark deal – already cleared by the U.S. Department of Justice on June 12 – now faces its most consequential remaining hurdle in Brussels, where regulators scrutinize the combined entity’s market power across European film distribution channels. 1

Key Takeaways

  • Paramount ready to sell Universal Pictures JV to satisfy EU antitrust demands
  • DOJ already approved the $110B deal on June 12, 2026
  • WBD shareholders backed the $31-per-share cash deal in April

Deal Structure & Market Context

The Paramount-WBD transaction values Warner Bros. Discovery at $81 billion in equity and $110 billion in enterprise value – roughly 7.5x fully synergized 2026 EBITDA – making it one of the largest media mergers in history. 2 By comparison, the rival Netflix bid that Paramount ultimately displaced valued WBD at $82.7 billion enterprise value at $27.75 per share; Paramount’s winning all-cash offer of $31 per share represented a meaningful premium that secured shareholder approval on April 23, 2026. 3

The deal is funded by $47 billion in new Class B Paramount equity at $16.02 per share, backed by the Ellison family and RedBird Capital Partners, alongside $54 billion in debt commitments from Bank of America, Citigroup, and Apollo. 2 A rights offering of up to $3.25 billion is expected closer to closing, giving existing Paramount stockholders a chance to participate.

The EU Concession: What’s at Stake

The Universal Pictures distribution joint venture sits at the center of European regulators’ concern over whether a merged Paramount-WBD entity would hold outsized sway over theatrical and home-entertainment distribution across EU markets. Offloading that stake would reduce the combined company’s footprint in a region where both studios currently operate significant distribution infrastructure.

No buyer for the JV stake has been publicly identified, and terms of any potential sale have not been disclosed. The move mirrors a pattern seen in other mega-media mergers where distribution assets – rather than content libraries – draw the sharpest regulatory focus. This deal’s scope, which spans more than 15,000 film titles and properties including Harry Potter, Game of Thrones, the DC Universe, and Mission Impossible, has drawn scrutiny from multiple jurisdictions. 2

Strategic Rationale & Management View

Paramount Chairman and CEO David Ellison has consistently framed the acquisition as a defensive competitive move against streaming giants. At the deal’s announcement, Ellison said the combination was guided by “a clear purpose: to honor the legacy of two iconic companies while accelerating our vision of building a next-generation media and entertainment company.” 2

WBD CEO David Zaslav, who is expected to play a role in the combined company, said the outcome “maximizes the value of our iconic assets and our century-old studio while delivering as much certainty as possible for our investors.” 2 Paramount has committed to releasing a minimum of 30 theatrical films annually and maintaining a 45-day global theatrical window before films move to paid VOD.

Regulatory Timeline & Closing Outlook

With DOJ clearance secured and WBD shareholder approval in hand, EU sign-off is the primary remaining condition before the deal can close. Paramount has targeted a Q3 2026 closing, though a “ticking fee” of $0.25 per WBD share per quarter applies if the transaction extends beyond September 30, 2026. 2

The combined company’s pro forma net debt-to-EBITDA is projected at 4.3x at close on a synergized basis, with management targeting investment-grade credit metrics within three years. Paramount expects more than $6 billion in synergies driven by technology integration, procurement savings, and real estate consolidation. For deal-focused investors, the EU concession on the Universal JV represents a calculated cost to preserve the broader strategic prize – a combined streaming, studio, and sports rights portfolio that management believes can compete directly with Disney (DIS) and Amazon (AMZN). 1

Not investment advice. For informational purposes only.

References

1(2026). “Proposed acquisition of Warner Bros. Discovery by Paramount Skydance”. Wikipedia. Retrieved June 24, 2026.

2(June 23, 2026). “PARAMOUNT TO ACQUIRE WARNER BROS. DISCOVERY TO FORM NEXT-GENERATION GLOBAL MEDIA AND ENTERTAINMENT COMPANY”. Paramount. Retrieved June 24, 2026.

3(April 23, 2026). “Warner’s future just moved a lot closer to Paramount”. Fox Business via Facebook. Retrieved June 24, 2026.