Britain’s Competition and Markets Authority formally opened a Phase 1 investigation into Paramount‘s (Nasdaq: PSKY) $110 billion acquisition of Warner Bros. Discovery (Nasdaq: WBD) on June 9, raising the prospect of a deeper regulatory review that could push the deal’s Q3 2026 closing target well beyond the calendar year.
The CMA published its commencement notice at 11:00 AM UK time on June 9, with the Phase 1 investigation beginning June 10. The authority set August 7 as its deadline to rule on whether the deal poses a realistic prospect of substantially lessening competition in the UK.
If that threshold is met, the CMA advances to a Phase 2 investigation lasting up to 24 weeks — a timeline that would effectively rule out any closing before early 2027. The CMA said it wanted to assess whether a studio merger of this scale could harm competition in an industry it described as contributing billions to the UK economy.
A Paramount spokesperson called the investigation expected and said the company would cooperate with the regulator. Paramount shares edged down 0.1%, and Warner Bros shares fell 1% following the announcement.
The deal, announced February 27, would combine two of Hollywood’s major studios alongside CNN, CBS News, HBO, Max, and multiple cable networks under CEO David Ellison’s Paramount Skydance. Warner Bros shareholders approved the merger on April 23.
The combined entity would be 38.5% owned by sovereign wealth funds from Saudi Arabia, the UAE, and Qatar — funds that carry no voting shares.
The CMA inquiry follows a June 3 submission by the Democracy Defenders Fund calling for a full Phase 2 probe on grounds of media plurality and press freedom, arguing the merger would consolidate control over news archives, creative rights, and editorial direction in ways that damage the UK’s media landscape.
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The merger now faces regulators on three fronts. Democratic attorneys general from California and New York are preparing a lawsuit to block the deal in the US, and European regulators continue their own review. Analysts expect Trump administration regulators to approve it.
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