Paramount Skydance shares dropped on Monday afternoon after a federal judge put a temporary stop to the company’s planned purchase of Warner Bros. Discovery.
A U.S. District Judge in Northern California issued a temporary restraining order that stops the two companies from moving forward with the merger. This order came after California’s attorney general, along with attorneys general from about a dozen other states, filed a lawsuit last week challenging the $110 billion deal on antitrust grounds.
In Monday’s ruling, the judge said the court found the plaintiffs’ arguments convincing. The court pointed to evidence that the merged company would control about 27% of the wide-release theatrical distribution market. Because of that market share, the court said it was ready to assume the merger would likely break antitrust law.
Warner Bros. Discovery declined to comment, and Paramount did not respond right away to a request for comment. Last week, Paramount argued that the merger would not hurt competition. Instead, they said joining with Warner Bros. Discovery would create a stronger, better-funded media company that could compete more effectively with Netflix and other major players in audience reach, premium content, and creative talent.
On Monday afternoon, Paramount Skydance shares fell by 1.4%, and Warner Bros. Discovery shares dropped by 1.3%.
