Merger between Paramount and Warner Bros blocked by judge

The proposed $110bn merger between Paramount Skydance and Warner Bros Discovery has been blocked.

The decision follows a lawsuit brought by a coalition of 12 US states, including California and New York, aiming to halt the deal “over concerns it would stifle competition and raise consumer prices”, the BBC reports.

State representatives argued that merging two studio giants would cause “substantial harm on movie theatres, basic cable distributors, and, ultimately, audiences nationwide”.

In response, the companies argued that the states had misread the market and that merging would improve streaming efficiency.

But US district judge Araceli Martínez-Olguín issued a 14-day restraining order on Monday, which stipulates that neither company can finalise the deal or begin any merger activities.

Judge Martínez-Olguín noted that the state coalition raised "serious questions" regarding the deal’s impact on movie distribution.

Her concerns included that allowing the merger to proceed now would make it "extraordinarily difficult to unscramble the egg" if the court decided later to block it.

Judge Martínez-Olguín added that "public's vital interest in antitrust enforcement" outweighed any temporary delay to the merger.

She said that the entities “will continue to operate as separate, viable companies competing in the marketplace.”