Twelve US states sue to block Paramount merger

• Twelve US states filed a lawsuit to block the proposed merger between Paramount and Warner Bros Discovery.
• Paramount shares rose 2.9% and Warner Bros Discovery shares gained 2.6% following the news of the legal challenge.
• The states argue the merger will reduce competition and raise consumer prices, while Paramount claims it will eliminate redundancy.

Twelve US states have filed a lawsuit in an Oakland federal court to block the proposed US$110 billion acquisition of Warner Bros Discovery (NASDAQ:WBD) by Paramount.

The legal challenge directly contrasts with the regulatory clearance received in June from the US Department of Justice.

“This merger, in short, would create a media behemoth,” the states said in the lawsuit.

The states stated that the combined entity would control 27% of the US theatrical film distribution market and 27% of the basic cable channel market.

Following the announcement the Paramount share price was up at US$11.85.

Paramount stated that the transaction will allow it to cut US$ in redundant infrastructure, marketing, and corporate jobs.

The company previously committed to pay approximately US$on in quarterly fees to Warner Bros Discovery shareholders if the deal fails to close before October.