Paramount Global (PARA) and Skydance have achieved significant milestones in their proposed merger, securing approvals from both the U.S. Securities and Exchange Commission (SEC) and the European Union. The merger now awaits the final green light from the Federal Communications Commission (FCC) to move forward.
On Thursday, the SEC approved Paramount Global’s S-4 filing, a crucial step in the merger process. Earlier in the week, the European Commission, representing the European Union, also gave its approval, stating that the merger does not raise significant competition concerns.
In its S-4 filing, Paramount Global stated, “On behalf of the Board of Directors of Paramount Global, a Delaware corporation, we are pleased to enclose the information statement/prospectus relating to the proposed transaction among Paramount, Skydance Media, LLC, a California limited liability company, and certain affiliates of investors of Skydance.”
The merger, however, still faces regulatory hurdles in the U.S. The FCC’s approval is essential, as the agency holds the authority to transfer broadcast licenses for Paramount’s 28 owned-and-operated local TV stations across the country.
Additionally, the merger is encountering challenges under FCC Commissioner Brendan Carr, a Trump appointee, who is revisiting a previously dismissed “news distortion” complaint against CBS, a subsidiary of Paramount. This complaint has been reopened, adding complexity to the regulatory process.
Further complicating matters, five New York City pension funds have filed a class-action lawsuit against the merger. The plaintiffs allege that Shari Redstone, Paramount’s controlling shareholder, and a special committee established to evaluate the merger breached their fiduciary duties.
Despite these obstacles, Paramount Global and Skydance have made notable progress. CWEB previously reported that the merger was pending approvals from the SEC and other regulatory bodies. According to CWEB analysts, while the companies have overcome significant hurdles, the path forward remains uncertain. The analysts suggest that the merger could still be finalized by the end of the year, but this will depend on how quickly regulatory and legal issues are resolved.
As the process unfolds, stakeholders will be closely watching the FCC’s decision and the outcome of the ongoing legal disputes to determine the fate of this high-profile merger. CWEB analysts emphasize that while the merger has strong potential, the current challenges highlight the complexities of large-scale corporate consolidations in a highly regulated industry.
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