The U.S. Department of Justice has approved Paramount's proposed acquisition of Warner Bros. Discovery, clearing the roughly USD 110 billion deal of federal antitrust concerns.

“The Division has completed its analysis of the proposed merger of Paramount and Warner Bros. and determined based on the evidence received in its investigation that the transaction is not likely to result in harm to competition or American consumers,” the department said in its determination.

A Paramount spokesperson said the company was “grateful for the Department of Justice’s thorough review of this transaction, as well as the work of the other agencies that have completed their reviews and provided clearance to date,” according to CNBC.

“This deal is pro-competitive, resulting in a stronger company better positioned to compete against dominant technology platforms in an industry increasingly defined by intense competition for audiences, talent, technology, and investment,” the spokesperson said. “We remain focused on completing the transaction as soon as possible and delivering its benefits to consumers, creators and the entertainment industry as a whole.”

The approval marks a key milestone for the transaction, though the merger could still face legal challenges from state attorneys general.

The office of California Attorney General Rob Bonta said on Friday that the deal “remains under investigation by the California Department of Justice.”

Shares of Paramount rose about 3% in after-hours trading following news of the approval, which was first reported by Politico.

Paramount Chief Executive Officer David Ellison told investors during the company's April earnings call that the transaction remained on track to close by September. After that date, a so-called ticking fee would increase the cost of the deal. Warner Bros. Discovery shareholders have already approved the merger.

Paramount in late February offered USD 31 per share to acquire all of Warner Bros. Discovery's assets, including cable television networks such as CNN and TBS, the Warner Bros. film studio and streaming platform HBO Max. The proposal followed multiple offers and disrupted a separate agreement under which Netflix was set to acquire Warner Bros. Discovery's streaming and film assets.

The company is still awaiting regulatory approval from European authorities. Earlier this week, the European Union's competition regulator opened its review of the proposed merger and set a July 14 deadline for its assessment, according to a notice published on its website.

Paramount said in a regulatory filing on Wednesday that the transaction had also received approval from the Australian Competition and Consumer Commission.