European Union regulators are studying Paramount Skydance’s prospective takeover of Warner Bros. Discovery over the deal’s financial backing from three Middle Eastern sovereign wealth funds, according to a public filing.
The inquiry, publicly confirmed Wednesday, deepens the scrutiny of a corporate tie-up that would unite two historic Hollywood studios under the same roof and reshape the American entertainment industry.
Paramount, which agreed to buy Warner in February for $110 billion, requested E.U. approval of the deal under the bloc’s foreign subsidies regulation. The European Commission, the E.U.’s competition enforcement arm, said it will decide by Sunday whether to sign off on the merger or open a full investigation.
In an April filing with the U.S. Securities and Exchange Commission, Paramount said its acquisition of Warner is backed in part by Saudi Arabia’s Public Investment Fund, Abu Dhabi’s L’IMAD Holding and the Qatar Investment Authority.
Together, the three Gulf sovereign wealth funds are putting up roughly $24 billion, according to a filing Warner submitted to the SEC in December. Paramount has said the combined company would be fully controlled by Paramount Skydance CEO David Ellison’s family and RedBird Capital Partners, an investment management firm based in the United States.
Paramount did not immediately respond to a request for comment on the E.U.’s review.
The European Union is not the only entity looking into the blockbuster deal between Paramount and Warner. California Attorney General Rob Bonta and the United Kingdom’s antitrust authority are also investigating the transaction. The corporate tie-up needs formal sign-off from the Justice Department, too.
“Paramount/Warner Bros is not a done deal,” Bonta said in a post on X in late February. “These two Hollywood titans have not cleared regulatory scrutiny — the California Department of Justice has an open investigation, and we intend to be vigorous in our review.”
The prospective merger has also drawn intense pushback from hundreds of Hollywood actors, directors, producers and writers.
In an open letter released in April, more than 1,000 entertainment professionals said the deal would “further consolidate an already concentrated media landscape, reducing competition at a moment when our industries — and the audiences we serve — can least afford it.”
Ellison has vowed to “honor the legacy of two iconic companies while accelerating our vision of building a next-generation media and entertainment company.” The 43-year-old media executive is the son of technology magnate Larry Ellison, the co-founder of Oracle and an ally of President Donald Trump.
Paramount owns a 114-year-old film studio, the Paramount+ streaming service and the CBS broadcast network. Warner owns a 116-year-old film studio, the HBO Max streaming service and a suite of cable channels, including CNN.