Paramount Skydance has agreed to halt its proposed $110bn acquisition of Warner Bros Discovery while a legal challenge from 12 US states is considered. The states, led by California, argue that combining the companies would reduce competition in cinema and cable television, while critics also fear job losses and greater political influence over major news outlets.

A temporary court order had already prevented the deal closing for 28 days; the new agreement extends the pause until a ruling or 1 June 2027. Paramount may owe Warner Bros shareholders about $7m a day if the transaction remains unfinished after 30 September, and comparable merger cases typically take around eight months to reach a ruling.