UK competition watchdog opens probe into Paramount's Warner Bros deal

(Alliance News) - The UK competition regulator has launched a phase 1 investigation into Paramount Skydance Corp's proposed acquisition of Warner Bros Discovery Inc.

The Competition & Markets Authority said on Tuesday it is considering whether the transaction could result in the creation of a relevant merger situation under the Enterprise Act 2002 and whether it may lead to a substantial lessening of competition in any UK market.

The CMA has set a deadline of August 7 for its phase 1 decision.

The deal was approved by Warner Bros shareholders in April. Under the terms of the agreement, Paramount will pay USD31.00 per share in cash for all outstanding Warner Bros shares, implying an equity value of around USD81 billion and an enterprise value of roughly USD110 billion, including debt assumed by the buyer.

New York-based Warner Bros. Discovery reported a widened net loss of USD2.92 billion in the first quarter from USD453 million a year earlier, although adjusted Ebitda rose 4.7% to USD2.20 billion. Revenue slipped to USD8.89 billion from USD8.98 billion, while its Streaming division delivered stronger growth in distribution, advertising, and subscriber-related revenue.

Warner Bros shares were 0.4% lower in pre-market trading at USD26.36 each on Tuesday morning in New York, while Paramount shares were also down 0.4%, at USD10.35 each in the pre-market.

By Eva Castanedo, Alliance News reporter

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