Paramount’s planned takeover of Warner Bros. Discovery has reached a crucial stage in Europe. Whilst media reports suggest the European Commission is moving towards granting approval, provided Paramount implements the necessary competition law concessions, the process could be prolonged in the UK.

Paramount took its most significant step to date by submitting commitments to the European Commission. As a result, the deadline for a decision in the first phase of the review was extended from 7 July to 22 July. According to consistent reports in the international trade press, it is considered likely that Paramount will divest its stake in United International Pictures (UIP), the joint film distribution venture with Universal Pictures in several European markets. However, the European Commission has not officially confirmed the content of the commitments submitted.

It had already become apparent that the Commission might, in principle, approve the takeover, provided that competition concerns were addressed. The potential withdrawal from UIP is regarded as a key condition in this regard. The markets affected would include, amongst others, Denmark, Greece, Hungary, Norway, Poland and Sweden. In Germany, however, this move would have little immediate impact, as Paramount and Universal have been distributing their films through their own distribution companies for many years.

Whilst a solution is emerging in Brussels, uncertainty is growing in the UK. The UK Minister for Culture and Media, Lisa Nandy, has announced that she is inclined to intervene in the proceedings and launch an in-depth review. Unlike the EU, the focus here is not on competition law issues relating to film distribution, but on safeguarding media pluralism. Particular attention is being paid to the merged company’s news and streaming services, as well as its television channels.

For the film industry, this means that whilst European approval is drawing nearer, the completion of the transaction remains dependent on the outcome of the UK’s review. Paramount is nevertheless sticking to its timetable and, according to its own statements, expects the takeover not to raise any issues regarding media diversity in the United Kingdom.

Should the European Commission accept the concessions on offer, one of the most significant regulatory hurdles in Europe would be cleared. Attention would then likely turn primarily to the proceedings in the United Kingdom.