Warner Bros. and Paramount’s $111 billion merger moves forward.

Paramount’s merger with Warner Bros. is on the verge of becoming a reality. The U.S. Department of Justice’s Antitrust Division announced that it has wrapped up its investigation into the deal and will not challenge Paramount’s $111 billion acquisition of Warner Bros., removing a significant regulatory barrier for this contentious entertainment merger.

This decision sets the stage for Paramount Skydance to merge with Warner Bros. Discovery, uniting major entities like CNN, CBS News, HBO, Paramount Plus, and a vast array of TV networks and intellectual properties under one roof. However, the merger has faced opposition from over 5,000 creators and labor unions, who are concerned it could stifle competition, limit consumer choices, and lead to widespread layoffs in the film and television sectors.

According to officials, “The Division has completed its analysis of the proposed merger of Paramount and Warner Bros. and determined based on the evidence received in its investigation that the transaction is not likely to result in harm to competition or American consumers.” They further argue that the merger of Paramount Plus and HBO Max could enhance competition by providing consumers with a stronger alternative to larger streaming services.

In terms of theatrical releases, the Division contends that the merger “is not likely to harm competition in studio development, production, or distribution of films for theatrical release.” They cite films like Backrooms, Obsession, and the upcoming Elden Ring adaptation as examples supporting their position.

“Non-legacy studios have successfully developed, produced, and distributed films with significant budgets exceeding $100 million, with more large-budget films on the horizon from studios like Lionsgate (Hunger Games), Netflix (Narnia), A24 (Elden Ring), and others,” the Division noted. “Recent box office successes since the announcement of the transaction demonstrate that a studio’s legacy does not dictate its ability to thrive in today’s domestic box office landscape, as seen with Amazon MGM (Project Hail Mary), A24 (Backrooms), Lionsgate (Michael), and Blumhouse (Obsession). These shifts in the industry suggest a pivotal moment in the competitive environment for theatrical production and distribution, reinforcing the Parties’ motivation to continue creating and distributing content.”

The Division’s statement does not touch on the gaming divisions of Paramount and Warner Bros. If the merger proceeds, the newly formed Paramount Game Studios would likely integrate Warner Bros. Games and its studios, including Avalanche Software, NetherRealm Studios, Rocksteady Studios, and TT Games.

While the Justice Department has given the green light, Paramount may still encounter legal challenges from several U.S. states. California Attorney General Rob Bonta indicated in February that the state was closely scrutinizing the Warner Bros. buyout and could potentially file a lawsuit to block it.

“Further consolidation in markets that are central to American economic life does not serve our economy, consumers, or competition well. In fact, consolidation has led to increased unaffordability, a loss of good-paying job opportunities, and fewer choices for consumers,” Bonta stated. “The film and entertainment industry in California is not only historically significant but also a vital sector that supports the state’s economy and impacts the lives of Americans daily. The proposed Warner Bros. transactions must undergo a thorough review, and California is committed to examining this closely. We are dedicated to combating unlawful market consolidation.”

Massachusetts Senator Elizabeth Warren remarked in April, following the Warner Bros. shareholders’ vote on the buyout, “The Paramount-Warner Bros. merger isn’t a done deal. State attorneys general across the country are stepping up to stop this antitrust disaster.”

After the Justice Department approved the deal on Friday, Warren described the decision as “terrible news.”