US, EU lawmakers pledge scrutiny over Paramount-Warner Bros. deal

A group of US and EU lawmakers said European regulators will “closely examine” Paramount’s proposed acquisition of Warner Bros. Discovery.

The lawmakers sent a joint letter to Paramount CEO David Ellison, shared exclusively with CNBC.

The regulators also warned that “shareholder approval has no bearing on the rigorous and comprehensive review” that the merger will have to undergo before their governments.

Lawmakers told Paramount Skydance CEO David Ellison that the company’s proposed acquisition of Warner Bros. Discovery

Warner Bros. Discovery will be subject to careful scrutiny by European regulators and he should not consider shareholder approval of the deal to be the final word.

The three European Parliament members and two Democratic U.S. House lawmakers issued their warning in a letter sent Thursday and shared exclusively with CNBC.

“In the European Union, the European Commission and the European Parliament will closely examine market definition, market share threshold, customer substitutability, vertical integration effects, and downstream impacts in the Internal Market pursuant to the EU Merger Regulation,” they wrote.

The lawmakers noted that despite a preliminary WBD shareholder vote approving the merger last month, it is still subject to scrutiny by their respective governments. And they warned that the merger could create new barriers to competition.

The combination would bring together powerhouse film studios in Paramount and Warner Bros. as well as two popular streaming services, a deep library of franchise content and a portfolio of TV networks that includes CBS, TNT, and CNN.

While the lawmakers also raised concerns about editorial independence.