The British government has signalled it may step into Paramount Skydance’s proposed $110 billion takeover of Warner Bros. Discovery, a move that could further delay the completion of one of the media industry’s biggest mergers.
British Culture Secretary Lisa Nandy said on Tuesday that she was considering formal intervention in the transaction, which would see Paramount take control of major assets including CNN, HBO and the Warner Bros. film studio.
Her concerns centre on the deal’s potential impact on media plurality in the United Kingdom.
“Following engagement with the parties and independent research, my Department has today written to the current and proposed owners of Warner Bros Discovery on my behalf to inform them that I am minded to intervene,” Nandy said in a statement.
In British government practice, the phrase “minded to intervene” indicates an intention to take action, subject to legal procedures and consultation.
Despite her announcement, Nandy stressed that no final decision has yet been taken. The companies involved have been given one week to respond to the government’s concerns before any formal step is taken.
Should the intervention proceed, it would represent a major regulatory obstacle for Paramount. The UK’s communications regulator, Ofcom, would be required to examine the merger in addition to an ongoing review by the Competition and Markets Authority.
Nandy said she was considering intervention on public-interest grounds, including the need to maintain a “sufficient plurality of views in news media” and a “sufficient plurality of persons with control of the media enterprises.”
A spokesperson for Warner Bros. Discovery declined to comment on the minister’s remarks.
Responding to the development, a Paramount spokesperson told CNN, “We are grateful for the continued constructive engagement with all interested government bodies and relevant authorities, including in the UK. We are confident that our proposed transaction does not pose any media plurality issues in the UK and remain confident in our stated transaction timeline.”
Paramount has maintained that it expects the merger to be completed during the third quarter of the year, before the end of September. Planning meetings focused on integrating the two companies have reportedly been underway for several months.
However, failure to secure all necessary approvals by the September deadline would trigger a provision in the agreement that increases the cost of the transaction.
Under the arrangement, Paramount would pay an additional 25 cents per Warner Bros. Discovery share for every quarter the deal remains unapproved.
The provision would add about $627 million to the overall price tag each quarter, equivalent to roughly $7 million per day, increasing pressure on Paramount to secure regulatory clearance as quickly as possible.
Any Ofcom review could take several weeks and potentially extend for months, adding uncertainty to the timeline.
The merger is also being reviewed by regulators in the European Union, although the European Commission is not expected to oppose the transaction.
Paramount has already received approval in a number of jurisdictions, including the United States, where the Department of Justice cleared the deal in June without demanding concessions.
The decision drew criticism from some observers, who accused Paramount of cultivating close ties with the administration of US President Donald Trump in order to secure favourable regulatory treatment.
Defending its approval, the Justice Department stated that “the transaction is not likely to result in harm to competition or American consumers.”
Meanwhile, a federal committee in the United States continues to examine the deal’s financing arrangements, particularly investments linked to Middle Eastern countries.
Federal Communications Commission Chairman Brendan Carr said, “we will go where the facts take us based on those reviews.”
The transaction is also facing scrutiny from a coalition of US state attorneys general, with analysts predicting legal action aimed at blocking the merger later this summer.
Speaking on MS NOW over the weekend, California Attorney General Rob Bonta reiterated his concerns, saying, “there are red flags in the air everywhere” with the Paramount deal.
Bonta added, “We’ll make a decision in the coming weeks.”
Paramount has rejected suggestions that antitrust challenges would have merit, insisting the merger would strengthen competition rather than reduce it.
“This deal is pro-competitive, resulting in a stronger company better positioned to compete against dominant technology platforms in an industry increasingly defined by intense competition for audiences, talent, technology, and investment,” the company said earlier this month.
