Paramount Skydance has committed to withdrawing from United International Pictures, its film distribution joint venture with Universal Pictures, as a condition for securing approval from the European Union for its $111 billion acquisition of Warner Bros. Discovery, according to a regulatory filing made public on Wednesday.
The European Commission’s antitrust authorities last week suggested Paramount drop its UIP stake to allay antitrust concerns voiced by European cinema operators over the Paramount-WBD merger. Set in 1981, the London-based UIP was once a major international distributor for both studios. But the operation has been scaled back over the years and now operates in just a handful of European markets, including Denmark, Greece, Croatia, Hungary, Norway, Poland, and Sweden.
The Commission has not disclosed further details of the remedies proposed by Paramount to address its concerns with the WBD deal, consistent with its standard practice in merger reviews. The Commission said it has now extended its “new provisional deadline” to reach a decision on approval of the mega-merger from July 7 to July 22. The move suggests EU approval of the deal could be forthcoming.
The Mega-Merger
The mega-merger, announced in February following a competing bid from Netflix for WBD, would combine Paramount’s portfolio — including CBS, CBS News, Paramount Pictures, and Paramount+ — with Warner Bros. Discovery’s HBO, HBO Max, Warner Bros. Pictures, CNN, TNT, TBS, and HGTV, among other assets. The deal includes a combined $24 billion in investment from Saudi Arabia’s Public Investment Fund, Abu Dhabi’s L’imad Holding Company, and the Qatar Investment Authority.
The Department of Justice in the US has already cleared the deal. However, in the UK, Culture Secretary Lisa Nandy said Tuesday she is considering intervening in the deal over concerns about media plurality, citing the combination of UK broadcaster Channel 5 and TNT Sports with Paramount+ and HBO Max under common ownership. Britain’s Competition and Markets Authority is conducting a separate review whose findings will inform Nandy’s final decision.
The UIP Joint Venture
United International Pictures was established in 1981 as a joint venture between Paramount and Universal to distribute their films internationally. For decades, UIP was a dominant force in global film distribution. However, as the studio landscape shifted and both companies developed their own international distribution capabilities, UIP’s role diminished.
Today, UIP operates only in a handful of European markets, making it a relatively modest asset for Paramount to sacrifice in order to secure EU approval for the much larger Warner Bros. Discovery deal.
The Bottom Line
Paramount Skydance has agreed to exit its joint venture with Universal Pictures and United International Pictures to win European Union approval for its $111 billion merger with Warner Bros. Discovery. The EU’s antitrust authorities suggested the move to address concerns from European cinema operators. The US Department of Justice has already cleared the deal, while the UK is conducting a separate review. The EU’s decision deadline has been extended to July 22.
