Paramount agrees to suspend its merger with Warner Bros. until 2027

Paramount agreed Friday to freeze its planned merger with Warner Bros. Discovery until June 2027, as a coalition of twelve U.S. states pursue legal action to overturn the $110 billion deal.

The agreement was formalized in a document filed with a federal court just days after a federal judge temporarily blocked the merger. In her ruling, the judge stated that the merger raised "serious questions" about its ability to "substantially reduce competition," concluding that "the balance of interests and the public interest clearly favor the complaining states."

Paramount, acquired last year by Skydance, controlled by the Ellison family, close allies of the president Donald TrumpThe company presented the suspension as a victory. "This is the fastest and clearest way to prove that this transaction is good for competition, good for consumers, and good for creators," the company stated. It sees this as "an outcome exactly as we sought from the outset: direct access to an evidence-based trial."

The Trump administration had approved the merger on June 12 without requiring any changes. The merger between Paramount Skydance and Warner Bros. Discovery, parent company of CNN and HBO, would have ended decades of fierce competition between two of the largest American media groups.

California led the legal charge, filing a lawsuit on July 13 along with eleven other states, all with Democratic leadership: Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Jersey, New Mexico, New York, Oregon, and Washington. These states believe the merger would create a "media behemoth" detrimental to the entertainment industry.

“We look forward to continuing our legal battle,” California Attorney General Rob Bonta said Friday, hailing “another huge victory in our effort to keep this illegal merger from ever happening.” His New York counterpart, Letitia James, denounced the deal as “bad for everyone who depends on a competitive entertainment industry,” from workers and artists to families who buy movie tickets.