Washington Said Yes in Days. Brussels Is Taking Its Time.

For a deal already waved through in Washington, Paramount Skydance's roughly $111bn acquisition of Warner Bros. Discovery is finding Europe a markedly tougher room. The combination would fold Paramount Pictures, CBS and a sprawling cable portfolio together with HBO, CNN and the Warner Bros. film studio, creating one of the largest media groups on the planet. In the United States it took the Justice Department's antitrust division only until 12 June to sign off. In Brussels, the clock is still running.

The transaction, led by Paramount chief executive David Ellison and valued at about $111bn including debt, was approved by Warner Bros. Discovery shareholders on 23 April at $31 a share. What remains is the European Commission's verdict — and it arrives in two parts, governed by two different bodies of law.

Two deadlines, two regimes

Under standard EU merger rules, the Commission has set a provisional deadline of 7 July to issue its first-phase decision. It has three options: clear the deal outright, clear it subject to remedies, or open an in-depth investigation that could stretch the review by months. A second, parallel review is running under the EU's Foreign Subsidies Regulation, with a deadline of 14 July. That instrument, only recently part of the Commission's toolkit, is designed to stop companies bankrolled by foreign states from distorting competition inside the single market.

The two reviews pull in different directions. The competition assessment turns on overlaps between the two companies' assets. The subsidies assessment turns on who is paying for the deal — and that is where Europe's questions become pointed.

The Gulf money question

Roughly $24bn of the financing comes from three Gulf sovereign-wealth funds: Saudi Arabia's Public Investment Fund, Abu Dhabi's L'Imad Holding Company and the Qatar Investment Authority. Together they would account for about 38.5% of the equity in the combined business, part of a foreign ownership share of around 49.5%. For a Commission increasingly wary of state-backed capital from Gulf nations and China, that profile invites scrutiny.

Paramount has sought to defuse the concern by stressing that the money buys influence, not control.

The ownership stakes "would not result in a transfer of control," Paramount has said, and the investors "would not hold any governance rights or board seats."

On the company's account, the combined group would remain firmly in the hands of the Ellison family and the US firm RedBird Capital Partners, with the Gulf funds holding non-voting equity. Whether Brussels accepts that the absence of board seats is enough to neutralise the leverage of nearly half the cap table is precisely what the July review must settle.

The price of a yes

Few expect the merger to be blocked. The likelier outcome is approval with conditions. According to multiple reports, Paramount is prepared, if pressed, to divest a children's channel to address overlaps — the kind of concession that would put assets such as its own Nickelodeon and Warner's Cartoon Network in play. The company is said to be hoping to avoid selling anything at all, and has not yet decided whether or when to file formal remedies.

The stakes reach well beyond the boardroom. The deal has drawn vocal opposition from actors, filmmakers and cinema operators, who warn that collapsing two of the six remaining major studios into one will narrow the field for talent, squeeze independent theatres and reduce the diversity of what reaches audiences. Britain's competition regulator has opened its own inquiry, meaning Paramount must satisfy reviewers on both sides of the Channel.

• Merger review: first-phase EU decision due 7 July — clear, clear with remedies, or escalate.
• Subsidy review: Foreign Subsidies Regulation verdict due 14 July on $24bn of Gulf financing.
• Likely remedy: divestment of a children's channel to resolve content overlaps.
• Still pending: a separate inquiry by the UK's competition authority.

Should the Commission clear both tracks in July, the last major obstacle to Mr Ellison's expanded empire would fall. Should it instead open a deeper probe, a deal that took Washington days could spend the rest of the year waiting on Europe.