EU Examines Middle East Funding Behind Paramount’s Warner Acquisition

FCC filings identify Saudi, Qatari, and Emirati investors supporting the deal.

The Warner Bros. logo is displayed on a water tower at Warner Bros. Studio in Burbank, Calif., on Sept. 12, 2025. Mario Tama/Getty Images

European Union regulators have launched a foreign-subsidy review of Paramount Skydance Corp.’s proposed $110 billion takeover of Warner Bros. Discovery, examining the role of state-backed Middle Eastern funds in financing the transaction.

The European Commission stated in a June 10 filing that it is reviewing the transaction under the bloc’s Foreign Subsidies Regulation (FSR) and has set a provisional deadline of July 14 for an initial decision.

The review comes alongside a separate EU merger investigation. Regulators have set a July 7 deadline to determine whether to approve the acquisition under the bloc’s competition rules or open a more extensive inquiry.

The proposed deal would combine some of the world’s largest entertainment and media brands, including CBS, Paramount Pictures, MTV, Nickelodeon, HBO, CNN, Discovery Channel, Warner Bros. Studios, and DC Studios.

The FSR review focuses on transactions that may involve financial support from non-EU governments.

The regulation, which took effect in 2023, allows Brussels to investigate whether foreign subsidies distort competition inside the European Union.

According to the European Commission, the law was introduced because subsidies from non-EU governments previously “went unchecked,” while aid granted by EU member states remained subject to scrutiny under state-aid rules.

The commission stated that the regulation is intended to address situations in which foreign financial support could give companies “an unfair advantage” when acquiring businesses or competing for contracts within the EU.

Gulf Funds Back Acquisition

Regulatory filings in the United States show that several state-backed Middle Eastern investment entities are expected to hold significant stakes in the combined company.

In an April 27 filing with the U.S. Federal Communications Commission, Paramount sought approval for foreign ownership associated with the Warner Bros. Discovery acquisition.

The filing identifies Saudi Arabia’s Public Investment Fund, Qatar Investment Authority, and Abu Dhabi-based L'Imad Holding Co. among investors supporting the transaction.

It states that Paramount requested approval for Public Investment Fund ownership of 15.1 percent equity and voting interests.

Paramount also requested approval for Qatar Investment Authority ownership of 10.6 percent equity and voting interests and for several L'Imad entities that collectively hold 12.8 percent equity and voting interests.

The filing does not suggest wrongdoing by any investor. However, the participation of sovereign-backed investment funds means that the transaction falls within the scope of the EU’s foreign-subsidy framework.

Merger Reviews Continue

The European Commission is separately reviewing the acquisition under the EU’s merger rules, while the UK’s competition regulator opened its own merger inquiry this week.

The UK’s Competition and Markets Authority has set Aug. 7 as the deadline for a phase one decision.

The UK review will run separately from the European Commission’s merger and foreign-subsidy investigations.

In the United States, Sen. Elizabeth Warren (D-Mass.) and 12 other Democratic lawmakers wrote to the Department of Justice and the Treasury Department on March 12, urging a close review of potential antitrust and national security issues associated with the deal.

“Congress has a responsibility to ensure that merger enforcement in concentrated creative industries—particularly transactions involving substantial foreign capital—is conducted rigorously and in strict adherence to federal law,” the lawmakers wrote at the time.

Not all observers expect regulators to block the transaction. Alden Abbott, former chief legal officer at the Federal Trade Commission during U.S. President Donald Trump’s first administration, argued in an April 13 blog post that the merger could enhance competition.

The transaction offers “plausible efficiencies to strengthen competition against larger, well-capitalized rivals,” Abbott wrote.

“Ongoing monitoring makes sense as the industry evolves,” he said. “But based on current evidence, the case for intervention looks weak.”

Federal Communications Commission Chairman Brendan Carr also expressed confidence about the proposal during a March interview with CNBC.

“If there’s any FCC role at all, it'll be a pretty minimal role,” Carr said. “And I think this is a good deal, and I think it should get through pretty quickly.”

Paramount agreed on Feb. 27 to acquire Warner Bros. Discovery through an all-cash offer of $31 per share. Warner Bros. Discovery shareholders approved the transaction on April 23.