The European Commission has opened a formal investigation into Paramount's $24 billion takeover of Warner Bros. Discovery, citing concerns about Middle Eastern funding for the deal.
The Commission filed notice this week that the merger will be examined under the EU's Foreign Subsidies Regulations. Brussels is seeking clarity on the sources of capital backing the transaction.
With a July 14 deadline, regulators are assessing whether the deal serves European interests. The investigation focuses on foreign investment supporting what would be one of the largest entertainment industry consolidations in recent years.
The EU's Foreign Subsidies Regulations prevent non-EU money from distorting competition in the bloc's markets. A merger combining two major entertainment companies triggers regulatory review.
Paramount and Warner Bros. Discovery are waiting for European approval, which is not guaranteed. The broader entertainment industry is watching whether the deal survives the regulatory process.
As streaming competition intensifies and legacy studios fight for market position, Paramount and Warner Bros. Discovery need the merger to proceed. The EU's intervention reflects growing regulatory attention to Middle Eastern capital in major Hollywood transactions.
The outcome will likely be determined over the coming weeks.
