A group of states, including California and New York, are preparing a lawsuit to block Paramount Skydance’s $110 billion acquisition of Warner Bros., two sources familiar with the matter told Reuters on Friday.
The lawsuit is expected to be filed in the coming weeks, the sources said. The case would mark the boldest move yet by the states in their effort to be at the forefront of US antitrust enforcement, as their better-funded counterpart agencies in the Trump administration take a more business-friendly view of enforcement.
Analysts have also viewed Paramount as facing an easier road to regulatory clearance from federal antitrust watchdogs in the US in part because of its political connections. Paramount CEO David Ellison’s father, billionaire Oracle co-founder Larry Ellison, has cultivated ties with President Trump.
Shares of Warner Bros fell after the news, and were down 3%. Paramount shares added slightly to losses and were down 7%.
A Paramount spokesperson said the deal would bring greater competition, and opposing it “means giving entrenched incumbents like Netflix an advantage they do not deserve.”
“We will continue to fight against any attempt to derail a deal that plainly benefits consumers, creators, and the industry as a whole,” the spokesperson said.
It was not immediately clear which other states would join the lawsuit. A spokesperson for California Attorney General Rob Bonta’s office said California’s investigation remains active but declined to comment further.
The proposed transaction has faced pushback from actors, writers and others in Hollywood over its potential to eliminate jobs.
Hollywood and Wall Street have been closely watching the high-stakes deal, which would bring together some of the entertainment industry’s most enduring franchises.
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