After 12 US states raise concerns around reduced competition, studios agree to pause a merger pending an antitrust trial.

The mega-merger between Paramount Skydance and Warner Bros. Discovery has been postponed until after an antitrust trial.

Variety reports the company agreed not to close the $111 billion (A$159b) transaction until five days after a trial is held or June 1, 2027, whichever is earlier.

It follows a coalition of 12 states, led by California, obtained a temporary restraining order earlier that blocks the merger. The states allege that the deal will reduce competition in the cable and theatrical markets, and should be blocked.

“Halting this merger while our case proceeds is a critical victory in our efforts to uphold the law and protect the film and television industries,” said New York’s attorney general, Letitia James, in a statement. “I look forward to continuing our case to stop this illegal merger.”

California Attorney General Rob Bonta, said, “Our argument against this illegal merger is straightforward: When too few corporations have too much power in markets central to American life, it makes things more expensive, and it makes things worse. Today’s agreement is great news for audiences, movie theaters, and the many people who write, build, and create the art, news, and entertainment so many of us enjoy. We are eager to continue to make our case in court and celebrate another tremendous win in our effort to ensure this unlawful merger never sees the light of day.”

“Today’s agreement is a significant win because the result is exactly what we have sought from the outset: a direct path to a trial based on the evidence,” a Paramount spokesperson said. “This is the fastest and clearest way to prove that this transaction is good for competition, good for consumers, and good for creators, a conclusion dozens of competition authorities around the world have already reached. Plaintiffs’ market definitions bear no relationship to the realities of today’s marketplace and cannot withstand scrutiny. We look forward to proving our case at trial.”