State AGs Issue Subpoenas in Paramount-Warner Bros. $110B Merger Probe

A coalition of state attorneys general has issued subpoenas to Paramount Skydance as part of an ongoing investigation into the company’s pending $110 billion merger with Warner Bros. Discovery, according to a U.S. Securities and Exchange Commission 10-Q filing.

The subpoenas, classified as civil investigative demands, target the Department of Justice’s review and the competitive implications of the merger. The filing does not specify which states issued the subpoenas or the number involved.

California AG Leads Independent Review

California Attorney General Rob Bonta, who is conducting a separate review of the deal and considering legal action, previously told TheWrap that “red flags are everywhere when you have a merger of this type.” He emphasized that state AGs are prepared to act “timely” but did not provide a specific timeline for a decision.

“We have been cooperating with the state attorneys general in responding to their requests.” — Paramount

Regulatory Hurdles Persist Despite DOJ Review Completion

Paramount executives had stated that the expiration of the DOJ’s Hart-Scott-Rodino review period removes “no statutory impediment” to closing the deal. However, the agency retains the authority to intervene in the regulatory process before finalization.

Additional Legal Challenges for Paramount

Beyond the state AGs’ investigation, Paramount faces:

• A shareholder demand letter requesting an inspection of its books and records to investigate potential breaches of fiduciary duties or misconduct related to the merger financing.
• An antitrust lawsuit filed in California.
• A separate complaint in New York alleging that Paramount’s proxy statement contains “materially false and misleading statements and omissions” regarding the transaction process, WBD’s valuation, and conflicts of interest among WBD’s directors and financial advisors.

Global Regulatory Scrutiny Continues

While the merger has secured shareholder approval, it remains subject to regulatory clearance. In the United Kingdom, regulators are preparing to launch their review, with the public comment period closing last week. Paramount has also requested approval from the Federal Communications Commission (FCC) for foreign investment in the deal, which will represent 49.5% of the combined company’s equity.

Deal Timeline and Financial Implications

The Paramount-WBD merger is scheduled to close by the third quarter. If the deal is not finalized by September 30, Warner Bros. Discovery shareholders will receive a 25-cent per share “ticking fee” for each quarter until closing. Should the merger fail due to regulatory issues, Paramount will pay Warner Bros. Discovery a $7 billion termination fee.