Foreign Subsidies Regulation

Brussels cleared Paramount Skydance's $110 billion takeover of Warner Bros. Discovery under the Foreign Subsidies Regulation on 14 July 2026, closing its probe into the roughly 38.5% of the deal's financing traced to Gulf sovereign wealth after Paramount offered concessions on the structure. The FSR clearance is separate from the Commission's parallel merger control review, whose provisional decision Deadline moved from 7 to 22 July 2026 after Paramount agreed to exit the United International Pictures theatrical distribution joint venture it has run with Universal Pictures since 1981, offered as the remedy for competition concerns in several European territories.

The regulation, formally Regulation (EU) 2022/2560, entered into force in January 2023 to close a gap in EU competition law: Brussels had long-standing powers over subsidies paid by its own member states, but none over financial support flowing in from foreign governments and state-linked funds. It lets the European Commission investigate mergers, public procurement bids, and general market Conduct where a foreign financial contribution may have distorted competition, with mandatory notification above set turnover and subsidy thresholds.

The Paramount-WBD case became one of the highest-profile tests of the tool since it entered force, running alongside the deal's separate EU merger-control review and a 13 July lawsuit from 12 US state attorneys general seeking to block the transaction on antitrust grounds. The clearance marks the FSR's first resolved use against a Gulf-backed media acquisition, and will be watched closely by other sovereign wealth funds eyeing Western media and technology assets.