UK’s Competition and Markets Authority Invites Public Comment on Paramount-Warner Bros. Merger

The United Kingdom’s Competition and Markets Authority is seeking the public’s comment on the $110 billion Paramount-Warner Bros. merger.

On Monday, the regulator launched an “invitation to comment,” allowing interested parties to submit “any initial views on the impact that the transaction could have on competition in the UK.”

The deadline for comments will be April 27. The CMA is asking that responses be sent to paramount.warnerbrosdiscovery@cma.gov.uk.

The invitation to comment comes after Paramount CEO David Ellison previously met with U.K. Secretary of Culture, Media and Sport Lisa Nandy to discuss issues in the film and TV industry and his bid for Warner Bros. Discovery in January.

In its notice, the CMA said that it has “received the necessary information from the parties to commence pre-notification,” but has not yet launched a formal investigation into the transaction.

“Effective competition helps ensure UK customers can enjoy quality content at a competitive price. The film and TV industries contribute billions to our economy, so it’s important we assess whether deals between studios may harm competition,” a CMA spokesperson told TheWrap. “Today’s invitation to comment is an initial step as we review Paramount’s purchase of Warner Bros Discovery. We expect to launch our Phase 1 investigation in the coming weeks.”

Under a Phase 1 review, the CMA would have 40 working days to decide whether the merger needs a more in-depth review. If it finds concerns with the merger, it will give the merging businesses five days to propose remedies to address its concerns.

The CMA would then have up to 5 more working days to consider the remedies. If none are offered or it does not accept them, the merger would be referred to a Phase 2 review. If if decides to accept remedies provisionally, it would publicly consult on them and consider any responses, with a deadline of 50 working days to make a decision.

If the review moves to Phase 2, an independent “inquiry group,” which consists of 3 to 5 people with a range of business, finance, economic and legal experience, would lead the investigation and makes the final decision within 24 weeks. In special circumstances, a Phase 2 investigation can be extended by up to eight additional weeks.

The inquiry group would then either clear the merger, consider remedies such as asset divestitures or a legal commitment from the merging businesses to behave in a certain way, or block the merger.

The CMA’s move comes after the Hart-Scott-Rodino waiting period in the U.S. Department of Justice’s review expired on Feb. 19. Despite the expiration, the DOJ can still investigate or challenge a Paramount-WBD deal.

Some U.S. lawmakers have also demanded that the Committee on Foreign Investment in the United States (CFIUS) to conduct a review of the deal, though Paramount has said that the Middle Eastern sovereign wealth funds who have contributed equity financing do not meet the threshold that would trigger a mandatory review.

Paramount and Warner Bros. expect the merger to close by the third quarter, subject to regulatory and shareholder approval. A shareholder vote is slated for April 23.

In the event the transaction does not close by Sept. 30, WBD shareholders will receive a 25 cent per share “ticking fee” for each quarter until closing. In the event that the deal does not close at all due to regulatory matters, Paramount will pay WBD a $7 billion termination fee.

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