(Updates with Paramount Skydance's statement in the fourth and fifth paragraphs.)
Paramount Skydance (PSKY) and Warner Bros. Discovery (WBD) are facing a lawsuit from California Attorney General Rob Bonta-led coalition of 12 state attorneys general seeking to block the companies' proposed $110 billion merger deal, the AG said Monday.
The lawsuit argues the deal would eliminate competition between two of the industry's five major film distributors and two of the five major basic cable channel owners.
"The coalition has asked Warner Bros. and Paramount not to close the merger until after the judicial process concludes, and if they do not agree, the coalition will be filing a temporary restraining order," the AG added.
Paramount Skydance said the lawsuit misrepresents both antitrust law and competition in the current entertainment industry. The company added that antitrust regulators around the world have already reviewed the transaction and concluded the merger would create a stronger competitor to dominant streaming and technology platforms.
"We will vigorously defend the transaction and demonstrate that this challenge is inconsistent with sound competition policy and the competitive realities of the media marketplace," the company said.
Warner Bros. Discovery didn't immediately respond to' request for comment.
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