China Clears Paramount Skydance-Warner Bros. Discovery Merger; UK and EU Approval Still Required

Chinese regulators have cleared the $110 billion Paramount Skydance-Warner Bros. Discovery merger, according to a source familiar with the decision. The approval was first reported by Semafor. China's sign-off joins approvals already secured from the United States, Australia, Germany, France, and Saudi Arabia.

The deal still requires antitrust approval from the UK and Europe, according to Intellectia.AI, citing Seeking Alpha.

Why China's Approval Matters, and Why It Has Limits

Both Paramount and Warner Bros. Discovery release films in China, so Chinese antitrust review was a required step. China has been a diminishing source of revenue for Hollywood as its domestic movie industry matures. Warner Bros.'s 2023 film Meg 2: The Trench grossed $53.3 million in China during its opening weekend, according to AsiaOne. Paramount's 2022 blockbuster Top Gun: Maverick, however, was never released there — a casualty of heightened tensions between the U.S. and China.

The merged company will compete in a market where access to China is increasingly selective and politically contingent. That is a business risk regulators reviewed, not a problem they solved.

The Jurisdictions Still Standing

The EU has yet to weigh in on the combination, and UK approval is also still required. These are the remaining significant regulatory gates before the deal can close. The EU's review process tends to be more exhaustive than the DOJ's, and Brussels has a track record of imposing behavioral remedies or outright blocking large media and tech combinations when it judges market concentration too high.

State-Level Legal Risk in the U.S.

The DOJ cleared the deal, but that is not the end of American legal exposure. According to Intellectia.AI, citing Seeking Alpha, multiple state attorneys general may plan to initiate lawsuits against the acquisition, which could delay the deal's completion and increase legal risks. No filings have been made public, and no charges or injunctions have been issued. These are unconfirmed reports of potential action, not active litigation, but the possibility adds a layer of uncertainty that the DOJ's federal green light does not eliminate.

The DOJ's decision to approve without conditions was clean but thin on public explanation. The department gave no detailed written findings on competitive effects, which makes it harder to evaluate whether the review was rigorous or cursory.

Where the Stock Sits

Intellectia.AI reports PSKY at $10.30 in its data display, with a Wall Street analyst consensus that skews toward Hold and Sell: 1 Buy, 7 Hold, 7 Sell. The average analyst price target is $14.08. Guggenheim analyst Michael Morris lowered his price target on PSKY to $12 from $14, maintaining a Neutral rating. Morgan Stanley analyst Sean Diffley upgraded the stock to Overweight from Underweight with a $14 price target, up from $11.

The spread between a $14.08 average analyst target and a $10.30 current price reflects genuine uncertainty about whether the deal closes and whether the combined company can compete in a streaming market dominated by established players.

What Comes Next

The EU and UK rulings are the concrete open questions. If both regulators follow the DOJ's lead and approve without conditions, the deal moves to close. If the EU demands structural remedies — divesting a network, licensing content libraries, or capping subscriber exclusivity windows — the merged company's economics change and the timeline slips.