US and EU Regulators Review Proposed Paramount-Warner Bros Discovery Merger

Discovery for $31 per share and has offered a $7 billion breakup fee if the proposed merger does not win regulatory approval. Funding for the deal includes nearly $24 billion from sovereign wealth funds from Gulf states, in addition to a credit facility and backing by Ellison's father, billionaire Oracle co-founder Larry Ellison.

Paramount previously said those Gulf state entities had agreed to forgo any voting rights in the new company.

According to a person familiar with the matter. If there were to be an issue with the foreign investment that would impact the overall deal approval, the Ellison family has backstopped the deal and would be prepared to step in, the person said. In late April Paramount filed a petition to the Federal Communications Commission for the indirect foreign funding.

"Such financing structures raise serious questions regarding national security, editorial independence, foreign state influence, and the potential for review by the Committee on Foreign Investment in the United States (CFIUS), particularly given the aggregation of sensitive user data and significant media assets under a single corporate owner.

In the European Union, the presence of foreign sovereign wealth funds may also raise questions regarding the application of the Foreign Subsidies Regulation," the lawmakers wrote.

U.S. The FCC would not have sole approval over the deal. "Public trust requires a rigorous and transparent review process. Please consider this letter formal notice that any suggestions the transaction has effectively cleared regulatory hurdles, are false," the lawmakers wrote.

The lawmakers also addressed editorial independence. Shortly after David Ellison's Skydance acquired Paramount last year, the combined company bought the online publication The Free Press and named its co-founder Bari Weiss as CBS News' editor-in-chief.

Long-awaited federal approval for the Paramount and Skydance merger came shortly after Paramount paid a $16 million settlement to President Donald Trump over a "60 Minutes" interview with then-Vice President Kamala Harris.

As part of the settlement, Paramount agreed to hire an ombudsman for CBS News. "[W]e warn about the impact of this merger on media pluralism, and we call for internal safeguards to guarantee that editorial decision making remains independent of the interests of corporate shareholders, particularly third-country investors," the lawmakers wrote.

Paramount did not immediately respond to an email seeking comment.