Judge halts Paramount's acquisition of Warner Bros.

A federal judge in California ordered Paramount Skydance and Warner Bros. Discovery to temporarily suspend their merger while a lawsuit filed by several states challenging the deal proceeds.

The companies are prohibited from closing their $110 billion deal for 14 days, until another hearing is held on August 3 regarding a preliminary injunction, which would prevent Paramount and Warner Brothers from closing the transaction before a final decision is made.

The states raised "serious concerns" about the deal's potential anti-competitive effects, the judge said in the ruling, adding that "the balance of interests and the public interest clearly favor the plaintiff states."

Last week, 12 states, led by California, filed a lawsuit to block the deal, in a direct challenge to the Trump administration's Department of Justice, which approved the merger last month.

The company resulting from the merger — which emerged after Netflix withdrew from the battle to acquire Warner Bros. — would control an extensive portfolio of assets, including CNN, Warner Bros. Pictures, and the HBO Max streaming service.

The saga has become politicized, and President Donald Trump has publicly stated that he will intervene in the deal, while the future of CNN hangs in the balance.

California Attorney General Rob Bonta stated last week that the merger of two of Hollywood's five major film studios would lead to "higher prices, lower quality, and less content" for the public.

"California and our sister states are fighting for free and fair markets, not rigged markets. America has no kings in government or our economy," Bonta said.