BRUSSELS, — The European Commission has conditionally approved Paramount’s proposed $110 billion acquisition of Warner, concluding the transaction no longer raises significant competition concerns after Paramount agreed to terminate a longstanding European film distribution agreement with Universal Pictures.

The approval removes one of the transaction’s most significant regulatory hurdles in Europe, though the merger remains subject to additional closing conditions and reviews in other jurisdictions. European regulators determined that ending the distribution arrangement addresses concerns that the combined company could have gained excessive leverage over the licensing and distribution of films across key European markets.

Competition officials had focused on whether the merger would reduce consumer choice, weaken bargaining power for cinemas and distributors, or limit opportunities for rival studios. By agreeing to unwind the existing distribution partnership, Paramount satisfied the Commission that the transaction would preserve competitive conditions within the European theatrical distribution market.

The merger would create one of the world’s largest entertainment companies, combining Warner’s extensive film, television and streaming portfolio with Paramount’s movie studios, broadcast networks and global content library. Industry executives have argued that greater scale is increasingly necessary as traditional media companies compete with technology giants and streaming platforms for viewers, advertising and premium content.

Investors have closely followed the regulatory process because the combined company is expected to pursue significant cost savings through operational efficiencies, content integration and international expansion. At the same time, analysts continue to watch whether further divestitures or behavioral commitments could be required by other competition authorities before the transaction closes.

The European Commission’s decision is likely to be viewed as an encouraging milestone for the companies, demonstrating regulators remain willing to approve large media consolidations when targeted remedies sufficiently address competitive concerns rather than requiring broader structural breakups.

For media companies, advertisers and investors, the decision also signals that regulators continue to scrutinize distribution arrangements alongside ownership concentration, particularly as streaming and traditional film distribution become increasingly interconnected.

JBizNews Desk | Wall Street

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