The European Union's competition regulator approved on Wednesday Paramount Skydance's acquisition of Warner Bros. Discovery for $110 billion, on condition that Paramount abandons its joint venture with Universal Pictures for film distribution.

The European Commission said Paramount will also not enter into any film distribution agreement with Universal in Europe for 10 years, and will not transfer distribution of Warner's films in cinemas to its own distributor, according to Reuters.

A US federal judge had ordered Paramount and Warner Bros. Discovery to halt their merger deal for at least two weeks, to allow several US states time to consider their lawsuit against the deal in court.

Twelve US states led by California filed a lawsuit last week to block Paramount's acquisition of Warner Bros., arguing that the new entity that would emerge from the deal "would eliminate competition" in Hollywood and reduce options for customers, especially moviegoers and cable TV network buyers across the United States.

Prosecutors from the states called on the two companies not to complete the deal pending a final court ruling on the lawsuit filed by the states against the deal. When the companies rejected the states' request, the latter went to court to obtain a temporary injunction to halt the deal, according to the Associated Press.

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