The U.S. Department of Justice has approved Paramount Skydance's proposed acquisition of Warner Bros. Discovery, according to a source familiar with the matter who spoke to CNBC on Friday. This approval is a significant step in the approximately $110 billion deal, which has faced scrutiny over antitrust issues and may still encounter legal challenges from state attorneys general, including California's AG Rob Bonta. The DOJ is expected to make a formal announcement regarding the approval soon. Paramount's stock rose approximately 4% in after-hours trading following the news.
Paramount CEO David Ellison indicated during the company's April earnings call that the deal is on track to close by September, at which point a 'ticking fee' would increase the cost of the acquisition. The proposed merger has already received approval from Warner Bros. Discovery shareholders.
In late February, Paramount proposed to acquire all of WBD's assets for $31 per share, which includes cable networks such as CNN and TBS, the Warner Bros. film studio, and the HBO Max streaming platform. This proposal followed several previous offers and disrupted a deal with Netflix for the acquisition of WBD's streaming and film assets.
Paramount is also awaiting regulatory approval from European authorities, with the European Union's regulatory body beginning its review of the deal and setting a deadline of July 14 for completion. Earlier this week, Paramount announced in a regulatory filing that the deal had received approval from the Australian Competition and Consumer Commission.