Paramount ready to sell Universal JV for Warner deal, source says

• Paramount shifted its remedy offer after EU regulators indicated no concerns about minor channel divestitures like children's brands, instead focusing on the Universal Pictures joint venture to address European cinema operators' worries
• The acquisition faces a separate EU review under the Foreign Subsidies Regulation due to financing from Saudi Arabia's PIF, Abu Dhabi's L'imad Holding, and Qatar Investment Authority, though unconditional approval is expected
• The U.S. Department of Justice cleared the deal last week, but California, New York, and other states are preparing a lawsuit to block the $110 billion transaction

Summary: Paramount Ready to Divest Universal JV for Warner Bros Acquisition

Key Transaction Details:

Paramount Skydance Corp is preparing to divest its film distribution joint venture with Universal Pictures to secure EU regulatory approval for its $110 billion acquisition of Warner Bros Discovery. The company will formally submit this divestiture offer next Tuesday, following meetings with EU antitrust regulators.

Regulatory Timeline:

The submission will extend the European Commission's preliminary review deadline from July 7 to July 21—a 10-working-day extension. The divestiture addresses concerns raised by European cinema operators about market concentration in film distribution.

Additional Regulatory Proceedings:

• The deal faces a separate EU review under the Foreign Subsidies Regulation due to backing from Saudi Arabia's Public Investment Fund, Abu Dhabi's L'imad Holding Company, and Qatar Investment Authority
• Paramount expects unconditional approval on the foreign subsidies front
• U.S. regulators cleared the acquisition last week, finding no competitive harm
• However, California, New York, and other U.S. states are preparing a lawsuit to block the deal

Strategic Shift:

Earlier reports suggested Paramount might divest minor channels, including children's brands, but sources now indicate those assets are no longer part of divestiture discussions as they haven't raised regulatory concerns.

Market Implications:

This $110 billion mega-merger would significantly consolidate the entertainment industry, combining major film studios and content libraries. The willingness to divest the Universal JV demonstrates Paramount's commitment to completing the transaction despite regulatory hurdles across multiple jurisdictions.