CMA clears Paramount Warner Bros merger after competition review

The UK Competition and Markets Authority has cleared the merger of Paramount and Warner Bros, concluding that the £85bn deal does not threaten competition in the British market. The watchdog opened its inquiry on 9 June after establishing that Warner Bros' UK revenues exceed the £100m threshold for scrutiny, but announced on Wednesday that it would not refer the transaction to a deeper phase two investigation.

The decision removes the final domestic regulatory hurdle for a deal that saw Paramount, backed by billionaire Larry Ellison and his son David Ellison, prevail in a bidding contest with Netflix earlier this year. Netflix walked away in February after declining to raise its offer for the entertainment group.

Market position and streaming landscape

The merged entity will become the UK's largest theatrical film distributor, yet the CMA found that strong competition from Sony, Universal, Disney and independent distributors would remain. Concerns that combining children's television channels could allow price increases were dismissed, with the watchdog noting that demand for paid children's TV is declining as audiences shift to free-to-air broadcasters such as the BBC and streaming platforms.

Similar logic applied to the streaming portfolio, where Paramount+, HBO Max and Discovery+ would come under common ownership. The CMA judged that the UK market is already heavily crowded with established services including Netflix, Amazon Prime and Disney+, making a substantial lessening of consumer choice unlikely.

Political scrutiny and regulatory context

The review attracted political attention when Lisa Nandy, then culture secretary in the Starmer cabinet, asked the CMA and Ofcom to examine the deal in June. The Wigan MP argued the merger threatened the range of services available to UK audiences. The watchdog's final assessment rejected that view, stating it did not believe the merger may be expected to result in a substantial lessening of competition in any UK market.

The outcome will be watched closely by City advisers who have criticised past CMA interventions as unpredictable. The regulator's approach under its new leadership is being seen as a test of the government's stated preference for growth-friendly regulation.