State Scrutiny Raises Deal Risks for U.S. CFOs

U.S. companies can no longer treat clearance from the Department of Justice or another federal agency as the final word on a transaction. State attorneys general, privacy regulators, utility commissions and local zoning boards are increasingly pursuing separate antitrust, consumer-protection and permitting reviews. The fragmented regime matters for CFOs because compliance is becoming a variable in deal timing, financing needs, infrastructure costs and expected returns, requiring contingency capital and operational flexibility from the outset.

The latest test involves Paramount Skydance’s $110 billion acquisition of Warner Bros. Discovery, which had cleared the U.S. Department of Justice. After a California-led coalition of 12 states sued, the U.S. District Court for the Northern District of California imposed a 14-day restraining order on July 20. A preliminary-injunction hearing is set for Aug. 3. If closing slips beyond Sept. 30, Paramount faces roughly $7 million a day in additional payments to Warner Bros. Discovery shareholders.