E.U. reviewing Paramount-Warner merger over Middle Eastern wealth funds’ backing

European Union regulators are studying Paramount Skydance’s prospective takeover of Warner Bros. Discovery

European Union regulators are studying Paramount Skydance’s prospective takeover of Warner Bros. Discovery over the deal’s financial backing from three Middle Eastern sovereign wealth funds, according to a public filing.

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The inquiry, publicly confirmed Wednesday, deepens the scrutiny of a corporate tie-up that would unite two historic Hollywood studios under the same roof and reshape the American entertainment industry.

Paramount, which agreed to buy Warner in February for $110 billion, requested E.U. approval of the deal under the bloc’s foreign subsidies regulation. The European Commission, the E.U.’s competition enforcement arm, said it will decide by Sunday whether to sign off on the merger or open a full investigation.