Paramount has agreed to freeze its $110 billion acquisition of Warner Bros. Discovery until a federal judge rules on a petition filed by 12 U.S. states against the deal, according to court documents filed Friday, Reuters reported.
Under the agreement, the parties will halt progress on the deal until five days after the judge issues a ruling on the merits of the case, or until June 1, 2027, whichever comes first. The delay could cost Paramount about $7 million per day in compensation fees it committed to pay Warner Bros. Discovery shareholders if the deal is not completed by September 30.
Paramount has agreed to freeze its $110 billion acquisition of Warner Bros.
(Photo: Valerie Macon/AFP, Mario Tama/Getty Images)
California and 11 other states filed a lawsuit against the deal on July 13, arguing that the merger could create a media giant with enough market power to raise prices in the film and television industries.
In June 2025, Warner Bros. Discovery announced plans to split into two separate companies — one focused on its film studios and streaming services, and the other holding its linear television assets.
The planned split instead triggered a bidding war over the company’s assets. In October 2025, Warner’s board rejected an initial offer from Paramount valued at nearly $60 billion, and in November of that year competing bids were submitted by Netflix, Comcast and Starz. In December 2025, Warner Bros. signed a merger agreement with Netflix valued at about $82.7 billion, covering only Warner’s streaming and film studio assets, while separating its linear television assets into a standalone company.
Netflix withdrew its offer in February 2026 after Warner’s board determined that Paramount’s revised competing offer — $31 per share, with a total value of about $110.9 billion, including linear television assets such as CNN — was superior to the existing agreement with Netflix. Warner and Paramount officially signed the updated merger agreement shortly afterward.
Warner shareholders approved the deal in April 2026 and the U.S. Department of Justice approved it about a month later. However, in early July, attorneys general from 12 states filed a lawsuit seeking to block the merger, arguing it could harm competition in film distribution, cable television and streaming. Following the lawsuit, a federal judge issued a temporary restraining order blocking completion of the deal for 14 days — an order that has now effectively been extended, with both sides’ agreement, until a final ruling in the case or until June 2027.
A Reuters review of similar challenges to mergers found that judges take an average of about eight months to issue rulings in such cases.