The European Union has opened an investigation into the proposed $111 billion merger between Paramount and Warner Bros. Discovery. Regulators are focusing on the roughly $24 billion being provided by three Middle Eastern sovereign wealth funds.

The European Commission is reviewing the deal under its Foreign Subsidies Regulation. The funding comes from the sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi. The regulator has set a provisional July 14 deadline for its review. A separate merger review is expected to conclude by July 7.

Foreign Ownership Draws Attention

Paramount has disclosed that foreign investors would own 49.5% of the merged company. About 38.5% of the equity would be held by the three Gulf states.

The proposed ownership structure has raised concerns in the United States. Congressional Democrats have urged the Trump administration to review the deal under foreign ownership rules. So far, the White House has not indicated whether it will take action.

A Paramount representative declined to comment on the EU investigation.

Paramount Defends Deal Structure

Paramount has said the Middle Eastern investors would not receive board seats or voting rights in the new company. Control would remain with the Ellison family and U.S.-based RedBird Capital Partners.

The company is also lobbying the U.S. Department of Justice on what it describes as the merger’s pro-competitive benefits. At the same time, several state attorneys general are considering legal action. Among them is California Attorney General Rob Bonta, who could seek to block the transaction on antitrust grounds.

Global Reviews Continue

The proposed merger is also under review in the United Kingdom. On Tuesday, the Competition and Markets Authority announced the start of its investigation.

In Australia, regulators have approved the deal, subject to a 14-day waiting period that ends on June 23. The Australian Competition and Consumer Commission said the merger “is unlikely to have the effect of substantially lessening competition in relation to the wholesale supply of films for theatrical release in Australia.”

The regulator also stated: “The materials do not support the view that Paramount and Warner Brothers are particularly close competitors or that they compete more closely with each other than with the other major film studios.”

According to Paramount, regulators in several countries have already approved the merger, including authorities across Europe and the Middle East.