Shares of Paramount Skydance and Warner Bros. Discovery experienced a significant decline after news emerged that a coalition of states is gearing up to file a lawsuit aimed at obstructing the proposed merger between the two media entities. The merger is currently undergoing a regulatory review process following the receipt of shareholder approval in April. Paramount CEO David Ellison has stated that the transaction is expected to be finalised by September.

On Friday, it was reported that a coalition of states is preparing to initiate legal action aimed at obstructing the merger, though the specific states involved remain unspecified at this time. Earlier on Friday, it was reported that California Attorney General Rob Bonta is poised to make a decision regarding the potential lawsuit aimed at blocking the deal. Paramount experienced a decline of 7%, whereas WBD saw a decrease of 2% during afternoon trading.

“Opposing this deal means opposing expanded consumer choice, new opportunities for creators and workers, and greater competition throughout the creative ecosystem—the opposite of what antitrust law is meant to achieve,” Paramount stated on Friday. “It also means providing entrenched incumbents such as Netflix with an advantage that is unwarranted.” We will persist in opposing any efforts to undermine an agreement that evidently serves the interests of consumers, creators, and the industry at large.