As governments worldwide increase scrutiny of major corporate mergers over concerns about competition, market concentration and media ownership, Paramount's proposed $110 billion acquisition of Warner Bros. Discovery has hit another legal hurdle in the United States.
Oregon Attorney General Dan Rayfield said the state will ask a Multnomah County court to delay the proposed deal by 60 days, arguing Paramount has failed to provide records related to its lobbying activities and regulatory strategy, according to NBC News.
Paramount has told Oregon it does not intend to complete the transaction before July 16. However, Rayfield said the state will ask the court to compel the company to produce the requested documents and prevent the merger from closing while Oregon completes its review.
"We're not going to let Paramount Skydance play hide the ball so they can rush through their massive merger," Rayfield said in a statement carried by Reuters. He added that Oregonians have a significant interest in the transaction because of its potential effects on the state's film industry, economy and consumer choice.
The dispute centers on Oregon's request for documents connected to "Project Warrior," Paramount's internal code name for its efforts to secure regulatory approval for the acquisition. The state is also seeking records relating to Paramount's lobbying of the Trump administration in support of the merger, along with information on whether the company played any role in the U.S. Department of Justice's public announcement clearing the transaction, the news agency reported.
Paramount rejected the allegations, saying the information Oregon seeks "has nothing to do with whether this transaction complies with Oregon's antitrust laws and is not a legitimate basis to delay a plainly lawful, pro-competitive transaction." The company said it has already provided documents relevant to the merger and maintains the acquisition will strengthen competition by creating a larger rival to streaming companies such as Netflix and Disney.
The Justice Department's Antitrust Division approved the merger last month after an eight-month review, concluding that the transaction would increase competition across the media and entertainment industry while benefiting consumers and workers.
Oregon's court filing is expected to cite a report by The Wall Street Journal that said senior Justice Department officials overruled career antitrust attorneys who had been leaning toward recommending a legal challenge to the acquisition. According to documents reviewed by Reuters, Oregon said that while it would ordinarily give substantial weight to the Justice Department's decision, those reports justify additional scrutiny before the merger is allowed to close.
The proposed acquisition has attracted attention beyond Oregon. Reuters reported in June that California, New York and several other states are preparing lawsuits seeking to block the transaction under their own antitrust laws, arguing they have authority to challenge mergers they believe could substantially reduce competition. Actors, writers and other media workers have also raised concerns that the combination could lead to job losses across the entertainment industry.
The transaction continues to undergo regulatory review outside the United States. Paramount recently offered concessions to the European Commission in an effort to secure approval for the acquisition after the Commission extended its initial review deadline from July 7 to July 22, Reuters reported. The company has said it is continuing to work with European regulators as they complete their assessment of the deal.
Paramount has also received approval or clearance from several international regulators, including authorities in Australia, China, New Zealand, Saudi Arabia, South Africa and Ukraine, while a number of European jurisdictions have also completed their reviews, according to previous company statements.
