Paramount can buy Warner in the EU, but must give up the joint distribution of films with Universal

The European Commission has authorized the acquisition of Warner Bros. Discovery by Paramount Skydance, on the condition that Paramount relinquishes its stake in a joint film distribution company with Universal and adheres for ten years to restrictions regarding the use of the same distributors. The Commission found that the transaction would not eliminate competition in film, television, or streaming production, but it could excessively concentrate film distribution to cinemas in several European countries.

In short

1. Paramount can buy Warner Bros. Discovery after the Commission approved the transaction in the first phase of European merger control, without opening an in-depth investigation.

2. Paramount must relinquish, within a maximum of 13 months from the completion of the acquisition, its stake in United International Pictures, the company through which Paramount and Universal jointly distribute films in numerous European countries.

3. For ten years, Paramount will not be able to enter into a new agreement with Universal for the joint distribution of films in the European Economic Area and will not be able to transfer Warner films to distributors who are simultaneously working for Universal or Disney in the targeted countries.

4. The Commission considered that, without these conditions, cinemas would have fewer negotiation alternatives and could receive less favorable terms for renting and distributing films, with possible effects on consumers.

5. An independent administrator will verify compliance with the commitments under the supervision of the Commission. The approval remains valid only if Paramount fully implements the assumed conditions.

Paramount and Warner are active in the production and distribution of films, series, television channels, and streaming services. Through the transaction, Paramount is expected to acquire a portfolio that includes Warner Bros., HBO, Max, CNN, Discovery Channel, DC Studios, Eurosport, and Warner Bros. Games, alongside its own assets, including Paramount Pictures, CBS, Nickelodeon, MTV, Showtime, Paramount+, and Pluto TV.

The Commission analyzed the effects of the acquisition on the production and distribution of films for cinemas, licensing audiovisual content, providing television channels, and audiovisual services offered directly to the public. For film production, the conclusion was that there would remain sufficient competition in the market, including Disney, Universal, Sony, Amazon MGM, A24, Lionsgate, and European studios.

Neither the integration of television and streaming activities was considered sufficient to block the market. In the case of pay channels for children, where the activities of the two companies overlap, the Commission found that streaming platforms offering content aimed at children would continue to exert competitive pressure on the resulting company.

The identified issue concerns the distribution of films to cinemas. Paramount has a structural partnership with Universal through United International Pictures, known as UIP. The company distributes films from both studios to cinema operators in several countries in the European Economic Area.

After the acquisition, the Warner portfolio would be added to this distribution structure. The Commission considered that the gathering of Paramount, Universal, and Warner films around the same distribution network would have increased concentration and commercial transparency among studios. Cinemas would have negotiated for a larger share of major films with the same distribution structure, which would have reduced their alternatives.

The risk did not concern the prohibition of access to films, but the conditions under which cinemas can schedule them. Distributors negotiate with cinema operators the share of revenue obtained from ticket sales, the duration of screenings, the number of rooms, and other commercial conditions. The Commission concluded that reduced competition among distributors could lead to less favorable conditions for cinemas and, ultimately, for the public.

To obtain approval, Paramount committed to also cease its stake in UIP in the European Economic Area within a maximum of 13 months from the closing of the transaction. The Commission's document does not specify how the exit will be achieved or the identity of a potential buyer of the stake.

For ten years, Paramount will not be able to directly or indirectly enter into an agreement with Universal for the joint distribution of films in the European Economic Area. The restriction aims to prevent the recreation, through another contractual form, of the structure that Paramount must relinquish.

In Bulgaria, Croatia, the Czech Republic, Cyprus, Denmark, Estonia, Finland, Greece, Hungary, Iceland, Latvia, Lithuania, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, and Sweden, Paramount will not be able to move the distribution of Warner films from the current Warner distributor to the distributor used by Paramount when it also distributes Universal or Disney films.

In UIP countries where Paramount and Universal do not use the same distributor, Paramount will not be able to transfer its own films to the Warner distributor when it is also working for Universal or Disney. Through these rules, the resulting company's films should not be distributed jointly with the portfolios of Universal or Disney.

The conditions do not obligate Paramount and Warner to permanently maintain all current distribution contracts nor do they prohibit changing distributors in general. The restrictions apply to situations where the change would reunite the resulting company's films with those of Universal or Disney through the same distribution structure in the covered countries.

The Commission tested the proposed commitments by consulting market participants and received favorable feedback. On this basis, it concluded that the transaction modified by commitments no longer raises competition concerns.

Approval does not mean that the acquisition is already finalized. The companies must close the transaction and comply with any approvals or conditions applicable in other jurisdictions. In the European Union, the decision is conditioned on the full compliance with the commitments assumed by Paramount.

An independent administrator will oversee the implementation of the measures and report to the Commission. In the event that Paramount does not comply with the conditions, the Commission may apply the measures provided by European merger regulations, including sanctions and the obligation to restore the competitive situation.

The transaction was notified to the Commission on June 2, 2026, and was analyzed in the first phase of the European procedure. Typically, this phase lasts 25 working days, and the deadline can be extended by ten days when companies propose commitments to resolve competition issues.

Paramount Skydance and Warner Bros. Discovery are American companies with global activities. The Commission's decision concerns the effects of the transaction on competition in the European Economic Area and does not represent a general assessment of editorial content, streaming service strategies, or future business decisions of the resulting company.

https://2eu.brussels/ro/news/paramount-poate-cumpara-warner-in-ue-dar-trebuie-sa-renunte-la-distributia-comuna-a-filmelor-cu-universal