European regulators have cleared Paramount Skydance's $110bn (£85bn) takeover of Warner Bros Discovery – though the mega-merger still faces a legal obstacle in the US.

The European Commission gave its green light after Paramount agreed to end a major film distribution partnership with Universal Pictures in Europe. Paramount will break off the deal within 13 months and cannot launch a similar venture for 10 years.

Watchdogs were concerned that sharing distribution with a rival would give the combined media giant too much control over cinema releases.

However, European approval is only half the battle, as the deal remains on hold in the US.

Although the US Department of Justice said in June it supported the merger, a coalition of 12 US states last week filed a lawsuit to block the deal.

They argue the merger would cause "substantial harm to movie theatres, basic cable distributors, and, ultimately, audiences nationwide".

Days later, US Judge Araceli Martínez-Olguín temporarily paused the takeover so those legal claims could be considered.

"The TRO itself is just a short pause and doesn't decide the case, but it signals that the court views the states' theatrical-market theory as serious," said Alon Kapen, a corporate transactional lawyer at Farrell Fritz.

Delays could carry a heavy price tag.

If the deal isn't completed by 30 September, Paramount will have to pay Warner Bros shareholders a "ticking fee" of roughly $7m a day until it closes.

The takeover is also being opposed by the Writers Guild of America (WGA), which warns the deal threatens jobs and wages.

In a statement following the states' legal filing, WGA head Tom Fontana said that the merged company would have "tremendous power to suppress our wages" and "eliminate opportunities for emerging writers".

Meanwhile, UK regulators are weighing up their own intervention over concerns about local news, children's television and streaming competition.

Paramount maintains that the merger will benefit viewers, promising to release at least 30 movies in cinemas every year – double its current output.