Warner Bros. Discovery Drops After Reported State Antitrust Plan Targets Paramount Deal

Warner Bros. Discovery shares fell in Friday’s trading after reports that several U.S. states, led by California and New York, are preparing antitrust lawsuits aimed at stopping Paramount Skydance’s acquisition of the entertainment company. The move comes even though Warner Bros. Discovery shareholders already approved the deal, meaning regulatory scrutiny is shifting toward what, if anything, could be required to clear the transaction.

The reports, covered in market commentary and local coverage, suggest the legal focus now includes whether state attorneys general would pursue structural remedies such as divestitures, or seek conditions that could affect the deal’s timing and economics. The possibility of additional legal challenges follows a broader pattern in U.S. antitrust enforcement, where states may try to weigh in when they believe a large merger threatens competition, even if federal review is underway.

The transaction at the center of the dispute is widely described as a roughly $110 billion to $111 billion combination. Under Paramount Chairman David Ellison’s proposal, Warner investors would receive about $31 per share. Shareholder approval in April cleared an important milestone, but the companies still need approvals from regulators in the U.S. and abroad before the merger can close.

In Friday’s session, Warner Bros. Discovery ended at $26.24, down 2.81%, after investors reacted to the state-law challenge reports. Trading volume rose to about 49.4 million shares, roughly 122% above Warner Bros. Discovery’s three-month average, according to market coverage.

The deal combines major media assets, including Warner Bros. studio operations and streaming brands, into what would be a much larger Hollywood and distribution platform under Paramount Skydance. From the companies’ perspective, the core risk of state lawsuits is not just whether regulators ultimately block the transaction, but whether any remedies imposed by courts or consent orders require the buyer to shed assets, alter content strategies, or accept conditions that reduce the value of the combined company.

Paramount, for its part, has said it will continue to fight attempts to derail the agreement. In earlier regulatory updates related to its antitrust clearance process, Paramount said it had complied with the U.S. Department of Justice’s second request for information tied to its all-cash tender offer, a step that can trigger waiting periods under federal rules. Paramount has also emphasized that it believes its offer is financed and designed to be certain, and that it continues engaging with antitrust enforcers and other regulators worldwide.

Still, as of the June 5 reporting, key details remained unclear. The coverage did not establish which states would ultimately file, what specific allegations would be made, or what remedies states would demand. It was also not clear from the public reporting whether a lawsuit would be filed immediately or later, and what that would mean for the timeline of both U.S. and European approvals.