Paramount and 12 states suing to block its $110 billion takeover of Warner Bros. Discovery could reach an agreement as soon as this weekend, with proposed terms including independent oversight of CNN and commitments on the number of films the combined company would release in theaters, Reuters reported.
The report added that the proposed settlement could include independent oversight of CNN and a commitment from Paramount on the number of films it releases theatrically.
The California Department of Justice said it could neither confirm nor deny whether settlement talks were taking place, citing confidentiality.
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Paramount and Warner Bros. Discovery did not immediately respond to requests for comment.
The proposed transaction is facing a lawsuit filed by California and 11 other states, which argue that combining two major Hollywood studios could give the enlarged company greater market power and allow it to raise prices for movies and television content.
US federal regulators have cleared the deal, but the states' legal challenge remains an obstacle to its completion.
The Writers Guild of America has separately sued to block the transaction, arguing that the merger could hurt writers' pay and working conditions.
Paramount CEO David Ellison has argued that the deal is necessary to strengthen the company's position against larger streaming rivals such as Netflix and Disney.
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The combined company would bring major properties including CNN, HBO, the “Harry Potter” franchise and NFL broadcast rights under one corporate umbrella.
Paramount has committed to paying Warner Bros. shareholders a $7 million daily fee if the transaction remains incomplete after September 30.
According to Reuters, Paramount shares gained nearly 7% after Friday's market close, while Warner Bros. Discovery shares rose 8.4% in after-hours trading.
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