Paramount’s proposed $110 billion acquisition of Warner Bros. Discovery has hit another major roadblock as its antitrust battle continues. According to Deadline, Paramount has agreed not to close the merger before June 1, 2027, or until a legal decision is reached on the lawsuit challenging the deal, whichever comes first.

The agreement follows legal action from 12 state attorneys general seeking to block the merger. California Attorney General Rob Bonta welcomed the delay, calling it “great news for audiences, movie theaters, and entertainment workers.

The Writers Guild of America also remains opposed to the transaction, with WGA West secretary-treasurer Peter Murrieta warning that it could “push down our compensation for writers” and reduce film and television output. Paramount disputes those claims and has described the merger as beneficial to Hollywood.

The development comes shortly after Paramount scored a major regulatory victory overseas. As mxdwn previously reported, the European Commission approved the Warner Bros. Discovery acquisition after determining that enough competitors would remain to challenge the combined company in the European Economic Area.

That approval came with concessions involving Paramount’s film distribution arrangements with Universal and appeared to clear a major obstacle as the company pushed toward its planned September closing. The latest U.S. court agreement now changes that timeline considerably.

The delay could also become expensive for Paramount, which has agreed to pay Warner Bros. Discovery shareholders a $7.2 million-per-day fee if the transaction does not close by Sept. 30. A $7 billion breakup fee could also be owed if the acquisition is abandoned. Investors reacted quickly, with Paramount shares touching a 52-week low while Warner Bros. Discovery shares also declined.

Legal experts told Deadline that Paramount may now focus its arguments on a full trial rather than continuing through the preliminary injunction process. If the company ultimately loses, experts expect it could appeal to the Ninth Circuit and potentially seek Supreme Court review.

Forrester Research VP Mike Proulx summarized the uncertainty surrounding the transaction, saying, “The deal may still close or it may not.” “What we know,” he added, “is that the path to either outcome just got longer, messier, and likely more expensive.”