Paramount reaches settlement with states in $110bn Warner Bros merger

Image source, Getty Images Image caption, A coalition of states led by California had challenged the deal, raising concerns over competition across film and television.

Paramount Skydance has settled a lawsuit with a dozen US states, paving the way for its $110bn (£82.8bn) merger with Warner Bros Discovery.

Under the agreement, Paramount must produce at least 30 films a year and ensure a certain percentage are produced in the US, or face penalties including selling off parts of its business.

The deal clears one of the final hurdles for the merger that is set to reshape Hollywood, combining legacy studios, major streamers, and national networks under one umbrella.

Announcing the settlement, California Attorney General Rob Bonta said the agreement was "not a vote of support for this merger", while Paramount's chief executive welcomed the resolution.