PARAMOUNT-WARNER BROS. MERGER CLEARS UK REGULATORY HURDLE AS US LEGAL CHALLENGES REMAIN. (PHOTO).

Paramount-Warner Bros. merger clears UK regulatory hurdle as US legal challenges remain

Paramount’s proposed $111 billion acquisition of Warner Bros. Discovery has cleared another major regulatory hurdle, but the deal continues to face legal challenges in the United States.

British regulators approved the merger Thursday, clearing the way for the transaction in the United Kingdom. The approval includes a requirement that Paramount maintain separate editorial control of Channel 5 News from CBS and CNN.

Paramount said governments and regulatory bodies representing 66 jurisdictions have now either approved the transaction or declined to challenge it on competition or foreign investment grounds. European Union regulators also approved the deal last month.

The merger would combine two major competitors in the film, television and news industries. Critics have raised concerns that the consolidation could reduce competition and lead to job losses, lower wages and changes in editorial policies.

Those concerns have been particularly focused on CNN. Paramount, led by CEO David Ellison, acquired CBS News last year, and critics have pointed to changes at CBS as a potential indication of what could happen at CNN if the merger is completed.

Despite regulatory progress overseas, the deal still faces significant opposition in the United States. Twelve states, led by California, have filed an antitrust lawsuit seeking to block the acquisition. A federal judge has scheduled a trial for March, prompting Paramount to delay the merger.

The Writers Guild of America has also filed a lawsuit, arguing that the merger could hurt writers by reducing employment opportunities, suppressing wages and limiting production.

Warner Bros. Discovery CEO David Zaslav acknowledged that the merger process has been difficult but said the companies remain confident it will ultimately close. Ellison has similarly expressed confidence in the transaction while saying Paramount remains open to resolving the legal dispute without going to trial.

The companies continue to argue that the combined business would be stronger and positioned for greater growth, while opponents maintain that the merger would give the resulting company too much control over the entertainment and media industries.