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What happened: Warner Bros. Discovery (WBD) and Paramount Skydance (PSKY) stock rallied 7% and 5%, respectively, on Monday.
What's behind the move: Paramount has reportedly reached a settlement with California officials, who had sought to block the company's $111 billion acquisition of Warner Bros. on antitrust grounds.
Under the agreement, the combined company would face financial penalties if it fails to release at least 30 films in theaters each year.
According to two people familiar with the discussions cited by Bloomberg, Paramount would pay $30 million for each movie short of that target. The report also said Paramount could be forced to sell its 49% stake in Miramax if it does not meet the target.
What else you need to know: Twelve Democratic state attorneys general, along with the Writers Guild of America, sued to block Paramount Skydance's acquisition of Warner Bros. Discovery on antitrust grounds.
The states argued that the deal would give Paramount too much control over the film and cable television industries. Settlement talks between Paramount and California Attorney General Rob Bonta have accelerated in recent days, although no final agreement has been reached.
Paramount's takeover followed a bidding battle with Netflix, which had previously made an offer for Warner Bros. Discovery. Warner shareholders approved Paramount's revised bid in April, valuing the deal at approximately $111 billion, including debt.
The acquisition would expand the entertainment assets controlled by Paramount chief executive David Ellison, son of Oracle (ORCL) co-founder Larry Ellison.
Ines Ferre is a senior business reporter for Yahoo Finance.
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Paramount settles with California, other states over Warner Bros merger, Bloomberg News reports Reuters • 2h ago WBD
Paramount settles with California, other states over Warner Bros merger, Bloomberg News reports
Warner Bros. Discovery Stock Soars as Paramount Makes Bold Merger Offer GuruFocus.com • 4h ago PSKY
Warner Bros. Discovery Stock Soars as Paramount Makes Bold Merger Offer
Paramount and Warner Bros. Shares Rise on Report of Progress in Merger Settlement Talks InvestorsHub • 6h ago PSKY WBD
Paramount and Warner Bros. Shares Rise on Report of Progress in Merger Settlement Talks
Paramount's Warner Bros. Fight Just Took an Unexpected Turn GuruFocus.com • 4d ago PSKY WBD
Paramount's Warner Bros. Fight Just Took an Unexpected Turn
Paramount and Warner Bros. Stocks Are Rallying. What That Says About the Takeover. Barrons.com • 1mo ago WBD PSKY
Paramount and Warner Bros. Stocks Are Rallying. What That Says About the Takeover.
Paramount's $110B Warner Bros. Deal Has a $30M Problem GuruFocus.com • 4h ago PSKY
Paramount's $110B Warner Bros. Deal Has a $30M Problem
Paramount Settles With 12 States, Clearing Path For $110 Billion Warner Deal Moby • 1h ago WBD
Paramount Settles With 12 States, Clearing Path For $110 Billion Warner Deal
Paramount/Warner Bros. Merger Talks With California Officials Scrubbed PREMIUM MT Newswires • 28d ago
Paramount/Warner Bros. Merger Talks With California Officials Scrubbed
Paramount's $110 Billion Warner Bros. Deal Faces State Challenge GuruFocus.com • 2mo ago PSKY WBD
Paramount's $110 Billion Warner Bros. Deal Faces State Challenge
Paramount to Settle Lawsuits, Paving Way for Warner Bros. Merger Bloomberg • 2h ago WBD
Paramount to Settle Lawsuits, Paving Way for Warner Bros. Merger
