UK keen on intervening in $110 billion Paramount-Warner Bros Discovery deal

LONDON - Britain is leaning towards intervening in Paramount Skydance Corp's PSKY.O proposed $110 billion takeover of Warner Bros Discovery WBD.O, citing concerns over the impact on media freedom and the provision of on-demand programming.

The move is the first step in a process that could see the deal referred to the country's anti-trust regulator, which made headlines in 2023 when it blocked Microsoft's $69 billion acquisition of "Call of Duty" maker Activision Blizzard to the fury of the two U.S. companies. It later changed its mind after Microsoft amended its acquisition plan.

Britain's possible intervention comes as the global deal has already been cleared by the United States, China, Australia, Germany, France and Saudi Arabia.

Culture minister Lisa Nandy, who set a July 6 deadline for the companies to respond, said in a statement: "I am mindful of the need to reach a final decision in a timely manner, and I will endeavour to do so as appropriate."

Nandy said while the deal was global in nature it would have an impact on British assets. Paramount owns Britain's Channel 5, a free-to-air broadcaster which broadcasts news programmes, while Warner owns CNN International.

Other businesses in Britain that could be affected include TNT Sports, Cartoon Network, Nickelodeon, as well as Paramount+ and HBO Max.

After the response deadline, Nandy will decide whether to issue a formal public interest intervention notice, which if she does, would trigger reviews by Britain's media regulator Ofcom and the Competition and Markets Authority.

The regulators have up to 40 days to report back. Once they do, Nandy would then decide whether to clear the deal or refer it for a further investigation, which can last up to 24 weeks.

If concerns are identified, the companies could seek to address them by offering remedies such as divestments or commitments to protect editorial independence.

Neither company responded to a request for comment.

Reporting by Muvija M and Sarah Young, writing by Sam Tabahriti; Editing by Kate Holton/Reuters