Paramount’s massive $110 billion US bid to take over Warner Bros. Discovery has run into a new hurdle in Canada. According to a report from Peter Nowak’s Do Not Pass Go, the Competition Bureau officially launched a review of the merger on March 12 to determine how it might impact the country’s film, television, and streaming markets.
The federal agency is required to investigate mergers when the value of the Canadian assets or sales involved exceeds specific financial thresholds. While the Bureau wouldn’t confirm the exact trigger for this case, industry insiders suggest the deal easily clears the bar.
“When you consider all the assets Paramount is acquiring – HBO, Warner Bros., Discovery cable and content licenses, WB theatrical distribution, WB Games, DC Comics distribution, physical offices and staff – it wouldn’t be surprising if it meets the threshold,” one observer familiar with the deal noted in the report.
The merger would combine two of the biggest players in the Canadian entertainment landscape. Warner Bros. is the powerhouse behind The Last of Us and operates a major games studio in Montreal, while Paramount is responsible for hits like Paw Patrol: The Movie.
A major point of contention is what happens to streaming. Paramount owner David Ellison plans to merge Paramount+ with HBO Max to take on Netflix and Disney+. This creates a potential conflict for Bell Media’s Crave, which currently relies on HBO content as its backbone.
We asked Crave how the deal would impact the streaming service earlier this month. On March 3, a Crave spokesperson told iPhone in Canada in a statement, “In addition to the best entertainment, news, and select sports storytelling in Canada, Crave remains home of HBO and HBO Max programming in Canada through a long-term deal with Warner Bros. Discovery for the foreseeable future.”
While some Toronto competition lawyers believe the Bureau is just “kicking the tires” on a major American deal, others say the investigation is necessary to protect the local industry. “The larger question is whether [the Bureau believes] it will lessen competition and require divestiture of any assets,” an industry source told Do Not Pass Go.
Beyond the Bureau, the deal could also face a net benefit test from Canadian Heritage Minister Marc Miller to ensure the merger doesn’t harm Canada’s cultural sector.
Warner Bros. Discovery said on Thursday that its shareholders will vote on the $110 billion merger on April 23.
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