Paramount Skydance Corp. may sell parts of its children’s TV business to win approval from European Union regulators for its $110 billion bid for Warner Bros. Discovery Inc. The company is considering the move to reduce competition concerns in Europe.

Possible Divestments Under Review

People familiar with the talks say Paramount is open to selling kids’ channels if regulators raise concerns about market overlap. However, the company has not made a final decision yet.

The overlap centres on Nickelodeon and Warner Bros. Discovery’s Cartoon Network. Both are major children’s brands in Europe, where many kids’ channels are US-owned.

“It’s certainly likely that the commission will scrutinise overlaps between Paramount and Warner Bros. Discovery in the wholesale supply of children’s television channels” across the region, said Jennifer Rie, a Bloomberg Intelligence analyst. “Concerns would be raised if combined market shares exceed 40% in any country.”

EU Review Timeline and Pressure

The European Commission must give an initial ruling by July 7. It can approve the deal or move it into a deeper investigation phase.

Paramount is preparing for possible remedies but is waiting to see the regulator’s reaction. If the EU raises issues, the company may need to act quickly.

Officials are also reviewing how the merger could affect film distribution and cinema release windows. Theatre groups want strong rules to protect exclusive cinema periods before streaming release.

Broader Regulatory Scrutiny

Paramount aims to close the deal in the third quarter of the year. A fast approval process could still speed up the timeline.

The company said it remains cooperative with regulators. It stated that “it’s been engaged with all regulatory and law enforcement bodies constructively and transparently and will continue to do so.”

Foreign Funding and Other Risks

The deal also faces review under the EU’s Foreign Subsidies Regulation. This is due to about $24 billion in funding from Middle East sovereign investors.

These include Saudi Arabia’s Public Investment Fund, Qatar’s Investment Authority, and Abu Dhabi’s L’Imad Holding Co.

In the US, some senators have called for “a rigorous and thorough review of the foreign investment in Paramount,” according to a letter to the FCC chair.