Last bid standing — Paramount’s Warner Bros takeover & the UK merger control test

A blockbuster bid for Warner Bros. Discovery (WBD) by Paramount is set to test the limits of UK and EU merger control following Netflix’s decision to step away from its proposed transaction.

The streaming market is already dominated by a small number of global players including Netflix, Amazon Prime Video, Disney+ and Paramount. Any major merger in this space risks reducing consumer choice, increasing pricing power and consolidating control over premium content.

Earlier in the process, WBD had been subject to competing proposals: an all‑cash consideration for WBD’s studios and streaming assets from Netflix and an all‑cash acquisition of the entire WBD group from Paramount.

However, after WBD’s board determined that Paramount’s enhanced proposal constituted a superior offer, Netflix declined to revise its bid and withdrew from the process. Paramount is now pursuing an acquisition of WBD in its entirety, including studios, streaming platforms and linear networks.

Here, Matt Brown and Paddy Fearnon explore why these developments are likely to trigger intense scrutiny by UK and EU regulators and whether they may set an important precedent for how consolidation in streaming and digital media is assessed in Europe.

CMA & merger control regime

In the UK, the principal legal framework governing these transactions is the merger control regime under the Enterprise Act 2002. The Competition and Markets Authority (CMA) will assess whether the transaction gives rise to a realistic prospect of a substantial lessening of competition (SLC), with the definition of the relevant market playing a decisive role. 

Competition law under the Competition Act 1998 remains relevant but typically comes into sharper focus after merger clearance, where issues of post‑completion conduct may arise.

Set against the Competition Act 1998 framework, the proposed acquisition raises concerns that extend beyond the impact of combining competing streaming services. In particular, it highlights broader issues around vertical integration including control over content production, ownership of valuable intellectual property and global direct‑to‑consumer (DTC) distribution. Where a single platform controls premium content alongside worldwide streaming infrastructure, it may be able to influence how content is created, licensed, distributed and ultimately accessed by consumers, giving it a gatekeeper‑like role within the market.

Paramount’s hostile takeover bid explained

• Scope: Acquisition of the entire WBD group, including studios, streaming platforms and cable networks such as CNN and TNT.
• Terms: All cash $31 per share, valuing WBD at approximately $111bn.
• Enhancements (as of February 2026):
  • Introduction of a $0.25 per share payable to WBD shareholders for each quarter that the transaction doesn’t close after 31 December 2026.
  • Commitment to fund the $2.8bn termination fee payable by WBD to Netflix if the Netflix deal is abandoned.
  • Additional assurances around refinancing and debt-related costs.
• Positioning: Paramount argues that its bid offers superior value and a clearer regulatory pathway while continuing to challenge the valuation attributed to WBD’s proposed cable spin-off.

With Netflix no longer pursuing a transaction, regulators will now assess a single, full‑group merger, rather than a partial asset acquisition accompanied by a structural separation. This shift materially affects both the theories of harm under consideration and the range of remedies that may be required.

How the CMA investigation works

The CMA conducts merger investigations under the Enterprise Act 2002 in two stages:

Phase 1

A 40‑working‑day initial review to assess whether the merger creates a realistic prospect of an SLC. Parties may offer remedies at this stage to avoid escalation.

Phase 2

An in‑depth investigation lasting around 24 weeks, involving extensive evidence gathering, market testing and economic analysis.

Given the size, complexity and political sensitivity of the transaction, Phase 2 scrutiny is highly likely, with timelines potentially extended due to parallel reviews in the EU and US.

The real regulatory issue: merger control & market definition

Merger control thresholds

Given the size of the parties involved, the transaction is almost certain to meet the UK’s merger control thresholds. 

The key triggers under the Enterprise Act 2002 are either:

• A UK turnover exceeding £100m.
• A combined share of supply of 25% or more in the UK or a substantial part of it.
• The newer ‘hybrid’ jurisdictional criteria that capture deals with a significant UK nexus.

Jurisdiction is unlikely to be contentious. The substantive assessment will be decisive.

Market definition

The central question for regulators will be how to define the relevant market — and the outcome of the merger review may hinge on this alone. Regulators can choose between a narrow or broad approach, with each leading to very different competition assessments.

A narrow definition — limited to paid‑for subscription video‑on‑demand services — would heighten concentration concerns by combining Paramount’s existing streaming content with HBO/Max’s premium content and production capabilities.

By contrast, a broader ‘attention market’ definition would recognise that consumers divide their time across a much wider ecosystem that includes platforms such as YouTube, TikTok, social video and podcasts, as well as traditional broadcasters. Ofcom’s Online Nation 2025 and Media Nations 2025 reports show that YouTube is the most‑used online platform in the UK, reaching around 94% of adult internet users. In terms of video viewing, YouTube is now the second most‑watched service in the UK, behind only the BBC and ahead of all subscription streaming services. Seen through this broader lens, paid‑for streaming platforms compete not just with each other but with powerful ad‑supported and user‑generated platforms for viewer time and attention, which can materially dilute apparent market concentration.

Updated market data will feature prominently. Netflix now reports over 325m paying subscribers globally and — while no longer a transaction party — remains a significant competitive constraint. HBO/Max continues to be a major premium brand. In the UK, however, Max isn’t yet available direct‑to‑consumer, with HBO content largely licensed through Sky/Now. This is an important nuance for UK‑specific theories of harm and market share analysis. Netflix’s UK market share is materially larger, meaning that a transaction involving Netflix would likely have faced more pronounced competition concerns. Paramount’s significantly lower UK market share may therefore make it easier for the parties to argue that the deal doesn’t give rise to a substantial lessening of competition.Ultimately, regulators must decide whether they’re assessing a premium scripted content market, subscription streaming market or multi‑platform attention economy. That choice will shape both the outcome and any remedies required.

Political dimension & US dynamics

Political dynamics have increasingly intersected with the legal analysis. In the US, the proposed transaction is expected to attract close scrutiny from the Department of Justice, extending review timelines and signalling non‑trivial antitrust scrutiny. In the UK, a group of senior politicians and former media policymakers have called for robust scrutiny of large‑scale consolidation in the streaming and media sector, citing concerns about dominance, plurality and consumer impact.

While UK and EU merger control processes remain institutionally independent and evidence‑driven, this level of political engagement raises the stakes and increases the likelihood of robust intervention.

Horizontal & vertical theories of harm

If the transaction progresses beyond jurisdiction and market definition, regulators will examine:

• Horizontal effects: Loss of rivalry, reduced choice, higher prices or diminished innovation in premium content markets.
• Vertical effects: Foreclosure risks arising from combining content ownership with global distribution, including exclusivity, bundling, self‑preferencing or discriminatory access.

The CMA and European Commission will rigorously test whether remedies can adequately address these risks.

What happens next?

The proposed acquisition faces significant hurdles before completion. Extended regulatory timelines, parallel UK/EU/US investigations and complex remedy discussions are all likely. 

Even if approved, regulators may impose conditions such as divestments, non‑discriminatory access commitments, restrictions on exclusivity or behavioural safeguards.

Implications for UK & EU businesses

This isn’t an isolated case — the Microsoft & Activision Blizzard mega-deal faced similar scrutiny around market definition and vertical integration. 

The key takeaways for businesses include:

• Assess competition risk early.
• Expect heightened scrutiny of vertical integration.
• Recognise the importance of data and IP.
• Account for political and public‑interest factors.
• Non‑compliance is costly, with potential fines of up to 10% of global turnover, director disqualification and criminal liability for cartel conduct.

The proposed bid signals a new phase of intervention in digital and media consolidation. Businesses planning acquisitions should anticipate deeper evidence standards, broader theories of harm and closer scrutiny of remedies. Early and explicit planning for competition risk remains essential to execution certainty in the UK and Europe.

If your organisation is considering a merger, acquisition or strategic partnership, it’s important to consider whether UK merger control rules could apply — even where turnover falls well below £100m. In particular, a transaction may still be caught where the parties have a combined share of supply of 25% or more in the UK or in a substantial part of it. What constitutes a ‘substantial part’ is highly fact-specific and can include a particular city or local area where a business has a strong market presence.

Talk to us

If you’re planning to acquire a competitor or expand your footprint in a specific locality and are unsure whether these rules may be triggered, early advice can be crucial. 

Our award-winning corporate and commercial lawyers can help you to assess the risks and navigate the merger control regime with confidence. 

To discuss your position, email hello@brabners.com, call us on 0333 004 4488 or fill in our contact form below.