Paramount Skydance's $111bn (£828mn) acquisition of Warner Bros Discovery has been approved by the US Department of Justice.

The approval marks a key development in the merger that will reshape media, allowing a takeover of the Hollywood studio, which owns CNN and HBO, to continue.

The sale has been filled with contention, from Paramount's battle with Netflix over the company to scrutiny over industry consolidation and worries about politics. David Ellison, the leader of Paramount, is the son of Larry Ellison, a major donor to President Donald Trump.

But it's not a done deal yet, as states like California are reviewing the sale and could sue to block it.

In a statement on its decision, the justice department said it had conducted a "rigorous" investigation of the proposed deal and found it was "not likely to result in harm to competition or American consumers."

Instead, the department said it found the deal would likely "increase competition across the media and entertainment ecosystem, with benefits for American consumers and workers."

Rob Bonta, California's Attorney General, said in late February that he was concerned any takeover of Warner Bros would further consolidate and limit competition in the entertainment industry, which has seen layoffs and cuts in recent years.

Earlier this month, Bonta said he would soon decide on taking formal legal action to block the merger.

A spokesperson for Bonta told the BBC said there was no update on that review and said it "remains under investigation".

More than 1,400 Hollywood actors, directors and filmmakers in April signed an open letter opposing the merger.

"The result will be fewer opportunities for creators, fewer jobs across the production ecosystem, higher costs, and less choice for audiences in the United States and around the world," the signatories said.

Skydance merged with Paramount in 2025 and cut about 10% of its workforce in the process.

While people in Hollywood fear jobs cuts and the impacts of fewer studios being in power, Paramount executives have said it was looking forward to what they say will be billions of dollars in cost-savings.

By taking over Warner Bros, Paramount will become one of the most powerful forces in Hollywood, adding news network CNN, TV networks HBO, TBS, TNT, TCM, as well as studios DC Studios and New Line Cinema to its current stable of assets. Those include Paramount Pictures, CBS, Showtime and Nickelodeon.

Paramount's control of CBS News and its 60 Minutes programme has come under intense scrutiny for programming decisions that critics say favour of the Trump administration, including new leadership firing long-time staff and well-known journalists.