Paramount Skydance has agreed to postpone its proposed merger with Warner Bros. Discovery until after an antitrust trial, following a legal challenge brought by a coalition of state attorneys general.

In a joint stipulation filed in federal court on Friday afternoon, Paramount agreed not to complete the $111 billion transaction until five days after a trial concludes or June 1, 2027, whichever comes first. Although no trial date has been set, the agreement is expected to delay the merger by at least several months.

The decision follows a temporary restraining order secured earlier this week by a coalition of 12 states led by California. The order blocked the merger from closing for 28 days while the court considered a request for a preliminary injunction.

The states argue that the deal would reduce competition across the cable television and theatrical film markets and should therefore be prevented from moving forward.

Paramount had been hoping to complete the transaction before September 30, when it is scheduled to begin paying Warner Bros. investors a $7-million-per-day ticking fee. The latest agreement effectively acknowledges that the deadline will be missed unless Paramount reaches a settlement with the states.

The company had previously requested a three-day hearing on the preliminary injunction in late August, with the aim of receiving approval to close the merger in early September.

The states opposed that proposal, arguing that they needed additional time to conduct discovery and prepare for a full trial. Their injunction motion was originally due to be filed on Thursday night, but the deadline was paused while both sides discussed a possible path forward.

A hearing had been scheduled for August 3 in federal court in Oakland, where the parties were expected to argue over the preliminary injunction. Both sides have now agreed to cancel that hearing.

U.S. District Judge Araceli Martinez-Olguin approved the joint stipulation on Friday afternoon, approximately one hour after it was submitted.

The Writers Guild of America had also filed its own motion seeking an injunction, which was due to be heard on August 3. That motion has now been withdrawn because Paramount has effectively agreed not to close the transaction until the antitrust claims have been decided.

Both sides are expected to submit another joint stipulation by July 31 outlining their respective positions on when the trial should take place.

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