Paramount may have to pay Warner Bros. Discovery shareholders up to $1.7 billion in delay fees if the merger is not completed on time.
Paramount Skydance has agreed to delay its planned $110 billion acquisition of Warner Bros. Discovery until after a court rules on a lawsuit filed by 12 US states.
The merger will remain on hold until next June at the latest, adding fresh uncertainty to one of the entertainment industry's biggest deals.
The delay could prove costly. Paramount may have to pay Warner Bros. Discovery shareholders up to $1.7 billion in delay fees if the merger is not completed on time. Starting September 30, the company could owe $7 million per day until the deal closes.
The states argue the merger would give the combined company too much control over the film and television industry, potentially leading to higher prices. Paramount said it remains confident and looks forward to defending the merger in court.