Los Angeles: The US Justice Department has approved Paramount Skydance’s $111 billion acquisition of Warner Bros. Discovery, marking a major milestone in one of the largest media mergers in recent years and delivering a significant win for the company backed by billionaire investor Larry Ellison.

The Antitrust Division cleared the blockbuster deal after an eight-month review, without requiring any changes, allowing the transaction to move forward.

It said the tie-up was “not likely to result in harm to competition or American consumers”, and could even increase competition.

The approval strengthens Paramount chief executive David Ellison’s position, as the deal was largely financed by Oracle co-founder Larry Ellison, one of the world’s richest individuals and a close ally of President Donald Trump.

A group of Democratic senators, led by Elizabeth Warren, had previously raised concerns, warning that a Warner Bros. deal risked being “tainted by political favouritism and corruption,” and urging the department to assess it strictly on law and facts.

Larry Ellison’s financial backing ultimately proved decisive, helping secure Warner Bros. Discovery after a heated bidding battle with Netflix.

The merged company will control a vast portfolio of media assets, including CNN, Warner Bros. Pictures, and the HBO Max streaming platform.

However, federal approval does not eliminate all legal risks surrounding the deal.

A coalition of around 10 US states led by California is preparing an antitrust lawsuit that could be filed as early as this month, according to Bloomberg reports.

California Attorney General Rob Bonta’s office has also said the acquisition “remains an active investigation.”

International scrutiny is also ongoing, with the European Commission reviewing the merger.

Hollywood has reacted with concern, with hundreds of actors and directors signing a letter opposing the deal, warning it could reduce production in an already strained industry facing consolidation and cost pressures.

The Justice Department, however, rejected those concerns, stating that available evidence did not show the merger would reduce output.

The takeover saga began last year when Netflix and Paramount entered a fierce bidding war for Warner Bros. and its valuable content library.

Netflix was initially seen as the frontrunner, but Paramount repeatedly increased its offer until the streaming giant eventually withdrew from the race.