EU Probes $24B Gulf Backing for Paramount’s Warner Bros. Deal

The European Commission has opened a Foreign Subsidies Regulation review of Paramount Skydance’s $110 billion bid for Warner Bros. Discovery, zeroing in on the roughly $24 billion the deal is taking in sovereign wealth funding from Saudi Arabia, Qatar, and Abu Dhabi. The Brussels-based regulator has set a provisional July 14 deadline to clear the merger or escalate to a full investigation, a separate track from a parallel antitrust probe with its own July 7 deadline.

The FSR review focuses on the equity from the three Gulf funds, none of which will hold voting shares in the combined company. A Paramount representative declined to comment on the new review. The company is still targeting a Q3 2026 close, with a deal deadline of September 30.

What the EU Just Opened

The European Commission confirmed the Foreign Subsidies Regulation review this week, posting a notice on its competition-cases portal with a provisional July 14 deadline. The probe runs in parallel to a standard merger investigation under the EU Merger Regulation, which has its own July 7 deadline.

• $110 billion: Paramount’s headline bid for Warner Bros. Discovery
• Saudi PIF, Qatar, Abu Dhabi: Three sovereign wealth funds backing the deal
• July 14, 2026: Foreign Subsidies Regulation review deadline
• July 7, 2026: Standard merger review deadline
• 49.5%: Foreign ownership of the combined Paramount-WBD

The FSR targets financial contributions from non-EU governments that could distort competition inside the bloc, and the three Gulf sovereign funds are the central focus of the new review. The two reviews will produce two separate decisions, and the company has not received clearance from either. A Paramount representative declined to comment on the FSR review when contacted by Variety. The deal has already cleared competition authorities in Saudi Arabia, Ukraine, Serbia, and North Macedonia, and foreign-investment reviews in Germany, Slovenia, Belgium, Czechia, New Zealand, Italy, France, and Romania.

Under EU rules, the Commission can clear a deal at Phase 1, clear it with conditions, or escalate to a Phase 2 review. Competition scholars have predicted a Phase 2 is likely, though no formal decision has been made. Bloomberg reported this week that Paramount is prepared to divest some of its children’s TV network assets to clear any EU hurdles.

The $24 Billion Gulf Stake

Saudi Arabia’s Public Investment Fund, the Qatar Investment Authority, and Abu Dhabi’s L’imad Holding Co. have together committed close to $24 billion in equity to back Paramount’s bid for WBD. They are joining U.S.-based RedBird Capital Partners and LionTree in the equity syndication, per an SEC filing Paramount made in April.

The breakdown of the Gulf money, drawn from an FCC filing Paramount made in April, is tilted toward Saudi Arabia. PIF is putting in a roughly $10 billion equity check, the single largest slice of the combined commitment. The U.A.E.’s L’imad Holding is the next-largest contributor by post-close stake, with Qatar’s QIA rounding out the trio.

• Saudi Arabia’s Public Investment Fund: roughly $10 billion equity commitment; 15.1% post-close equity stake
• Abu Dhabi’s L’imad Holding Co.: 12.8% post-close equity stake (individual commitment not specified in public filings)
• Qatar Investment Authority: 10.6% post-close equity stake (individual commitment not specified in public filings)

The three sovereign funds will together own 38.5% of the equity in the combined Paramount-WBD entity, with foreign investors as a whole owning 49.5% of the merged company, per the FCC filing. Paramount has structured the deal so that those equity stakes carry no voting rights or board seats. The Ellison family and RedBird will retain the largest single equity stake and full voting control as the sole owners of Class A common stock. Paramount has framed the equity syndication as “an important milestone” that “will not impact the timing or likelihood of closing,” in the April SEC filing. The EU’s new FSR review is the first European competition test of that framing.

Why Foreign Subsidies Are Now a Question

The FSR is an EU regulation that targets financial contributions from non-EU governments in merger reviews. The trigger in this case is the sovereign-wealth equity from PIF, QIA, and L’imad, money that the Commission now has the basis to examine. Paramount’s defense, repeated to U.S. regulators and the press, is that the Gulf money carries no governance, voting, or board rights, and the combined company will remain under Ellison family and RedBird control. The defense is structurally similar to the one Paramount is making to the FCC, which is weighing whether the foreign-ownership structure needs a separate declaratory ruling.

When the transaction and equity syndication close, the Ellison family and RedBird will collectively hold the largest equity stake in the combined company and continue to be the sole owners of Class A Common Stock, representing 100% of the voting shares, with no other equity syndication party having any governance rights, voting shares or board representation.

A Paramount Skydance representative made the case to Variety, framing the FCC petition as part of the same no-voting-rights defense. The Commission has not signaled whether that argument will be enough to clear the FSR review.

The Wider Regulatory Web

Brussels is the highest-stakes stop, but it is not the only one. The U.K.’s Competition and Markets Authority opened a formal Phase 1 investigation into the same deal on June 9, with a statutory deadline of August 7 for the watchdog to decide whether to refer the merger for a deeper Phase 2 probe. Around ten U.S. state attorneys general, including California’s Rob Bonta, are preparing antitrust litigation to block the deal.

Two recent decisions went in Paramount’s direction. On June 9 the Australian Competition and Consumer Commission approved the deal, subject to a 14-calendar-day waiting period that expires on June 23, 2026. In its decision the ACCC said the deal “is unlikely to have the effect of substantially lessening competition in relation to the wholesale supply of films for theatrical release in Australia.” On June 5 the New Zealand Commerce Commission told Paramount Skydance it “does not intend to consider the Merger further,” citing the voluntary nature of the country’s clearance regime.

Even with the European and UK probes open, the path of least resistance is still the United States. The Department of Justice’s Hart-Scott-Rodino waiting period expired in February, though the DOJ retains the right to challenge the deal. Paramount is also continuing to lobby the FCC for a declaratory ruling on the foreign-ownership question, a petition the company has described as “completely standard.”

Paramount’s argument is that the Gulf money carries no governance or voting rights, so the FCC’s 25% foreign-ownership threshold for broadcast licensees is not breached. Congressional Democrats have urged the Trump administration to refer the deal to the Committee on Foreign Investment in the United States. The White House has not signaled that a CFIUS review is coming. Paramount’s deal team has been working the regulators in person, with chief executive David Ellison meeting UK culture secretary Lisa Nandy in January and DOJ officials in May. The next major milestone is the EU’s July 14 FSR decision.

The Q3 Clock and the $7 Billion Backup

Paramount and WBD are still targeting a Q3 2026 close, with September 30 as the deal deadline. Paramount chief executive David Ellison has said the combined entity will be ready to operate as one company the moment the merger closes, and the company has been signing off the regulatory to-do list country by country.

If the deal slips past the deadline, WBD shareholders receive a 25 cent per share “ticking fee” for each quarter the deal remains open. If the deal collapses entirely because of regulatory action, Paramount owes WBD a $7 billion termination fee. The Ellison family has separately pledged to guarantee any outstanding amount if anything arises before the deal closes.

WBD shareholders overwhelmingly approved the deal in April, the same month Paramount’s SEC filing named the three Gulf funds. The next major milestone is the EU’s July 14 FSR decision. The UK CMA’s August 7 deadline is close behind it. A possible U.S. state AG lawsuit could also surface, with California’s Rob Bonta’s office telling Variety the investigation remains active.

Why Brussels May Not Clear the Deal at Phase 1

Three factors make a Phase 2 EU probe the more likely outcome. First, the FSR review is testing a substantial sovereign-wealth equity commitment in a media deal, the kind of trigger the Commission rarely sees. Second, competition scholars have already predicted a Phase 2 review is likely, on the grounds that the standard Phase 1 review rarely resolves novel FSR questions at the first pass.

Third, Bloomberg reported that Paramount is prepared to divest some of its children’s TV network assets to clear any EU hurdles, a concession that is more typical of a Phase 2 remedy negotiation than a clean Phase 1 clearance. The FSR review and the standard merger probe can each run their own course. A Phase 2 escalation on either track would push the closing window past the Q3 2026 deal deadline. A Paramount spokesperson has framed the equity syndication as a milestone that “will not impact the timing or likelihood of closing,” and the next two months are when Brussels decides whether to accept that framing.

Frequently Asked Questions

How much is the Paramount-WBD deal worth?

Paramount is paying $30.00 per share in cash for WBD Series A common stock, a deal the company itself values at $110 billion. Variety rounds the headline number to $111 billion in its reporting. The total enterprise value is higher still, and includes the assumption of WBD’s debt. The all-cash offer announcement spells out the terms.

Which Middle Eastern funds are backing the deal?

Saudi Arabia’s Public Investment Fund, the Qatar Investment Authority, and Abu Dhabi’s L’imad Holding Co. The three are contributing close to $24 billion in equity commitments, with PIF taking a roughly $10 billion stake. They are joining U.S.-based RedBird Capital Partners and LionTree in the equity syndication.

Why is the European Commission reviewing the deal?

The Commission opened a review under the EU’s Foreign Subsidies Regulation, a rule that requires companies to disclose large financial contributions from non-EU governments when they seek EU merger approval. The trigger is the equity from the three Gulf sovereign wealth funds, which gives the regulator a basis to examine whether the financial backing distorts competition inside the bloc.

What happens if the deal doesn’t close?

Paramount and WBD are targeting a close before the September 30 deal deadline. If the deal misses that date, WBD shareholders receive a 25 cent per share ticking fee for each quarter it remains open. If regulatory action kills the deal, Paramount owes WBD a $7 billion termination fee.

When does the EU decide?

The Commission has a provisional deadline of July 14 for the Foreign Subsidies Regulation review and July 7 for the standard merger review. Either could be cleared, cleared with conditions, or escalated to a deeper Phase 2 investigation. The Commission has not signaled which way it is leaning.