UK says it's minded to intervene in $110-billion Paramount-Warner Bros merger

UK Culture Secretary Lisa Nandy said the proposed merger could have implications for Britain's media landscape and that she was considering intervention on public interest grounds.

In Short

• Culture Secretary Lisa Nandy concerned over media plurality and news availability
• Companies given until July 6 to respond before formal intervention
• Regulators Ofcom and CMA may investigate impact on competition and media diversity

The UK government is preparing to scrutinise Paramount Skydance's proposed $110 billion takeover of Warner Bros Discovery, with Culture Secretary Lisa Nandy saying she is minded to intervene over concerns that the blockbuster media merger could affect media plurality and the availability of news and on-demand programming in Britain.

It marks the first formal step towards a potential government review of one of the world's biggest media deals. If ministers decide to proceed, Britain's competition and broadcasting regulators could launch parallel investigations into the transaction despite it already receiving approval in several major global markets.

UK FLAGS MEDIA FREEDOM CONCERNS

In a written statement to Parliament on Tuesday, Nandy said the proposed merger could have implications for Britain's media landscape and that she was considering intervention on public interest grounds.

"Following engagement with the parties and independent research, my department has today written to the current and proposed owners of Warner Bros Discovery on my behalf to inform them that I am minded to intervene," she said.

Nandy has given the companies until July 6 to respond before deciding whether to issue a formal Public Interest Intervention Notice.

"I am mindful of the need to reach a final decision in a timely manner, and I will endeavour to do so as appropriate," she added.

WHY BRITAIN IS CONCERNED

Although the proposed acquisition is global, the UK government said it could directly affect several major media businesses operating in Britain.

Paramount owns Channel 5, one of the country's free-to-air broadcasters that airs national news programming, while Warner Bros Discovery owns CNN International.

The combined company would also have interests in TNT Sports, Cartoon Network, Nickelodeon, Paramount+ and HBO Max, giving it a significant presence across television, streaming and news.

British authorities are examining whether the merger could reduce media plurality -- the principle that ensures a diversity of media ownership and editorial voices -- as well as its potential impact on on-demand programming available to UK audiences.

REGULATORS COULD STEP IN

If Nandy decides to formally intervene, the case will be referred to communications regulator Ofcom and the Competition and Markets Authority (CMA).

The two regulators would have up to 40 days to assess whether the transaction raises concerns over media plurality or competition.

Based on their findings, the government could approve the deal, seek legally binding commitments from the companies or order a more detailed investigation lasting up to 24 weeks.

If concerns remain, the companies could be asked to offer remedies, including selling certain assets or guaranteeing editorial independence for affected news organisations.

The CMA has previously shown a willingness to block major international deals. In 2023, it initially stopped Microsoft's proposed $69 billion acquisition of Activision Blizzard before later approving the transaction after Microsoft restructured the agreement.

PARAMOUNT PUSHES BACK

Paramount Skydance sought to reassure the British government, saying it did not believe the merger posed any threat to media plurality in the UK.

"We are confident that our proposed transaction does not pose any media plurality issues in the UK and remain confident in our stated transaction timeline," a company spokesperson said.

Neither Paramount nor Warner Bros Discovery commented further on the government's announcement.

Britain's scrutiny comes even though the proposed merger has already secured regulatory approval in several major jurisdictions, including the United States, China, Australia, Germany, France and Saudi Arabia.

Even so, the UK government has stressed that its review will focus specifically on the impact the combined company could have on British broadcasting, news services and media diversity.

- Ends
With inputs from agencies