Multiple U.S. states are gearing up to file legal action aimed at stopping the massive $110 billion deal between Paramount Skydance and Warner Bros, according to two sources with knowledge of the situation who spoke with Reuters on Friday.
The specific states planning to join the legal challenge have not been identified, though California’s top prosecutor had indicated Thursday that a decision on potential action would come soon. On Friday, representatives from that office refused to provide additional comment.
Stock prices reflected investor concern following the news, with Warner Bros shares dropping 1.8% while Paramount stock fell 4%.
The entertainment and financial sectors have been monitoring this significant transaction closely, as it would combine several of the industry’s most iconic and long-standing franchises.
The merger proposal has generated opposition from performers, screenwriters and other industry professionals who worry it could lead to widespread job cuts.
Company officials have pushed back against claims that employment in creative roles would decline, arguing that the combined entity would actually need to produce additional content following the merger to draw more streaming platform users.
