The proposed £80 billion takeover of Warner Bros by Paramount is facing a significant hurdle, as a dozen US states have launched a lawsuit against the deal. The lawsuit, filed in a US court, alleges that the merger would give Paramount an unfair monopoly in the film industry and harm competition.
Paramount's plans to bring together two of Hollywood's five largest film studios have been highly anticipated, with the aim of creating a formidable rival to Netflix and Disney. The combined entity would have a vast library of content, including iconic franchises such as Star Trek and Harry Potter.
Warner Bros, which is owned by AT&T, has been at the centre of a bidding war for several months. Paramount, which is a subsidiary of Paramount Global, emerged as the frontrunner in the deal in May.
The lawsuit is a major setback for Paramount, which had hoped to complete the takeover by the end of the year. However, the outcome of the lawsuit is uncertain, and a court hearing is scheduled for later this summer.
The deal has been scrutinised by regulators in both the US and the UK, with many expressing concerns about the potential impact on competition in the film industry. The lawsuit is likely to further delay the deal, with a review of the merger expected in the coming months.
Streaming services, including Netflix and Disney+, have been expanding their content offerings in recent years, with a growing focus on original productions. The Paramount-Warner Bros merger would aim to challenge this dominance and provide a new platform for Hollywood's biggest franchises.