WASHINGTON (dpa-AFX) - A planned meeting between Paramount and California officials to discuss a possible settlement in the state's lawsuit challenging Paramount's proposed $110 billion acquisition of Warner Bros.
Discovery has been canceled after California Attorney General Rob Bonta accused Paramount of leaking and misrepresenting confidential settlement discussions.
Bonta said the talks demonstrated a lack of good faith and that his office will resume negotiations if Paramount engages sincerely. Paramount denied being responsible for the leaks and said it remains willing to pursue discussions aimed at resolving the lawsuit.
The merger is being challenged by a coalition of 12 Democratic state attorneys general, who argue that the deal would reduce competition and harm Hollywood. A separate lawsuit has also been filed by the Writers Guild of America.
Paramount CEO David Ellison has pushed for a settlement as the company faces significant financial pressure if the transaction remains unresolved. Under the merger agreement, Paramount could owe Warner Bros. Discovery shareholders about $7 million for each day after September 30 that the deal remains uncompleted.
California officials have indicated that any settlement would likely require structural remedies, potentially including the sale of cable networks and commitments to keep Paramount and Warner Bros. movie operations separate. Such concessions could significantly alter the financial rationale behind the proposed merger.
An antitrust trial is scheduled for March, while the merger agreement is set to expire in June, leaving Paramount under increasing pressure to reach an agreement with the states.
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