Paramount to Exit Universal Distribution Joint Venture to Win EU Approval for Warner Bros. Merger

Paramount Skydance has committed to withdrawing from United International Pictures, its film distribution joint venture with Universal Pictures, as a condition for securing approval from the European Union for its $111 billion acquisition of Warner Bros. Discovery, according to a regulatory filing made public on Wednesday.

via: Variety

The move is in response to a request for Paramount to exit the venture made by the European Commission’s antitrust watchdog last week. The European Commission said on Wednesday that a regulatory filing in which Paramount Skydance affirms its commitment to pull out of UIP has been submitted, adding that the “new provisional deadline” for the Commission to reach a decision on approval of the mega-merger has now been extended from July 7 to July 22.

UIP, which was formed in 1981 and is based in London, has since been scaled back and is currently active as a distributor in several European territories including Denmark, Greece, Croatia, Hungary, Norway, Poland and Sweden.

“We can confirm that today we have submitted a remedy to the European Commission,” a Paramount spokesperson said in a statement to Variety.

“We have been working constructively with the Commission for 8 months and are confident that this remedy directly and comprehensively addresses any concerns expressed in the European Commission’s preliminary assessment and support the path for timely clearance,” the statement added. “We look forward to continuing to work constructively with the European Commission and all remaining regulatory agencies as they advance their review process for this pro-competitive transaction.”

The megadeal, inked in February after a protracted battle with Netflix, would bring bring together Paramount assets including CBS, CBS News, Paramount Pictures and Paramount+ with WBD’s HBO and HBO Max, Warner Bros. Pictures, CNN, TNT, TBS, HGTV and more.

The EU Commission’s review is among the last major regulatory obstacles that Ellison must face to create a global behemoth. The deal is also undergoing regulatory review in the U.K., where the British government is likely to intervene, according to the U.K.’s Secretary of State for Culture, Media and Sport Lisa Nandy. On Tuesday, she cited concerns over there being “a sufficient plurality” of people who control U.K. media. In the U.K., the merger will bring U.K. broadcaster 5 and TNT Sports under the same ownership beside streamers Paramount+ and recently launched HBO Max.

Saudi Arabia’s Public Investment Fund (PIF), Abu Dhabi’s L’imad Holding Company and the Qatar Investment Authority (QIA) are jointly putting up a total of $24 billion investment into the Hollywood megamerger. But that does not seem to be an issue with either the EU or the U.K.