Paramount Skydance Corp is preparing to sell its film distribution joint venture with Universal Pictures as it seeks to address European Union antitrust concerns surrounding its proposed $110 billion acquisition of Warner Bros Discovery (WBD).

According to Reuters, the proposed divestment is part of a broader effort to secure regulatory approval for one of the largest media mergers in recent years. The remedy package emerged after discussions with European competition authorities and is expected to be formally submitted to regulators next week.

If accepted by the European Commission, the proposal would automatically extend the regulator’s preliminary review period by 10 working days, moving the current decision deadline from July 7 to July 21.

The development marks a shift in the regulatory focus surrounding the deal. Industry observers had initially expected European authorities to seek relatively limited remedies, such as the divestiture of smaller television assets or children’s channels. However, regulators have reportedly moved away from concerns related to broadcasting and television networks.

Instead, the European Commission is said to be concentrating on issues raised by cinema operators and distributors regarding the combined entity’s influence over theatrical film distribution in Europe. As a result, Paramount’s distribution partnership with Universal Pictures has emerged as a key asset under scrutiny.

The proposed sale is now viewed as a critical concession aimed at alleviating concerns about market concentration in the film distribution sector. By divesting the joint venture, Paramount hopes to demonstrate that the merger will not adversely affect competition or limit opportunities for exhibitors and distributors across European markets.

While regulatory discussions continue in Europe, the transaction has already received a significant boost in the United States. Last week, the U.S. Department of Justice approved the merger after concluding that the combination of Paramount Skydance and Warner Bros Discovery was unlikely to substantially reduce competition or harm consumer choice in the American market.

The European Commission’s decision is widely regarded as the final major regulatory hurdle facing the transaction. Industry analysts believe the outcome of the proposed divestment will play a decisive role in determining whether the deal can move forward on schedule.

If approved, the merger would create one of the world’s largest media and entertainment companies, combining major film studios, television networks, streaming services and extensive content libraries under a single corporate structure.

With negotiations entering a crucial phase, attention is now focused on whether European regulators will consider the proposed sale sufficient to address competition concerns and clear the path for the historic media consolidation.