Paramount Global secured approval from the European Commission on Wednesday to proceed with its $111 billion acquisition of Warner Bros. Discovery, marking a significant regulatory milestone for the deal. The commission’s consent permits the merger to move forward within the European Union, adding to approvals or non-challenges from 64 other regulatory authorities worldwide, according to Paramount.

This approval came with a key condition: Paramount must terminate a film distribution partnership with Universal Pictures in Europe. The European Commission found that while the merger would create a highly concentrated film distribution market, sufficient competition remains among film producers, including other major U.S. studios such as Disney, NBC Universal, Sony, as well as smaller studios like Amazon MGM, A24, Lionsgate, and European studios. To address competition concerns, Paramount has 13 months to dissolve the United International Pictures joint venture that distributes Paramount and Universal films in Europe. The company is also barred from entering any direct or indirect agreements with Universal to co-distribute films in the EU for the next decade.

Concerns about consolidation in children’s television markets did not prompt divestiture requirements. Despite overlaps between Warner’s Cartoon Network and Paramount’s Nickelodeon, the commission concluded that streaming platforms offering children’s content would continue to provide competitive pressure.

The European Commission’s authorization aligns with other regulatory clearances in Australia, Brazil, Canada, China, Saudi Arabia, Serbia, and South Africa, although the United Kingdom’s Competition and Markets Authority is still reviewing the merger. Paramount obtained U.S. Justice Department approval last month.

Paramount has aimed to complete the transaction by late September to avoid triggering a $7 billion breakup fee payable to Warner Bros. Discovery shareholders. The combined company would own Warner-owned assets such as HBO, CNN, and the Burbank studios behind iconic franchises including Batman, Superman, and Harry Potter.

However, the deal has faced significant legal challenges in the United States. A federal judge issued a temporary restraining order on Monday, halting the transaction for at least 14 days amid an antitrust lawsuit brought by 12 state attorneys general led by California Attorney General Rob Bonta. The lawsuit alleges the merger violates U.S. antitrust laws by potentially diminishing competition and harming consumers. A hearing is scheduled for Aug. 3 to consider whether to extend the injunction.

Paramount has asserted that the European Commission’s findings dispute key claims in the state lawsuit, particularly regarding market definitions and the competitive effects of blockbuster films. “This approval marks another significant milestone in bringing Paramount and Warner Bros. Discovery together,” said Makan Delrahim, Paramount’s chief legal officer.

Critics remain unconvinced. Alvaro Bedoya, a former Federal Trade Commission commissioner now with the American Economic Liberties Project, emphasized differences between U.S. and European antitrust approaches, stating, “This is not remotely over. The United States is not Europe.” Additionally, the Writers Guild of America filed its own antitrust complaint last week, contending the merger would reduce job opportunities and wages for writers.

In her ruling granting the temporary restraining order, Judge Araceli Martínez-Olguín noted the difficulty of unwinding the transaction once integrated operations proceed, highlighting potential harms from the consolidation. If the deal is blocked or delayed beyond next summer, Paramount faces substantial financial penalties under its agreement with Warner Bros. Discovery.