Energy and Our World

This article originally ran on Forbes.com on December 23, 2025. All rights reserved.

Daniel B. Markind is a Forbes.com energy column contributor. The views expressed in this article are not to be associated with the views of Flaster Greenberg PC.

On December 7, 2025, Constellation Energy settled a lawsuit previously filed against it by the United States Department of Justice and the State of Texas. The settlement has had the effect of allowing Constellation to complete a planned $26.65 billion purchase of Calpine, which DOJ and Texas had initially objected to on antitrust grounds.

Assuming nothing else now occurs to further derail the merger, with this antitrust settlement, Constellation is now set to become the largest wholesale power provider in the nation, giving Constellation substantial market power, even though it also risks reducing competition in the power sector. (Source).  

Meanwhile, in another market entirely, Netflix has recently announced an agreement to purchase Warner Brothers Discovery for a massive valuation of $82.7 billion. (Source).  The target company, WBD, controls a library of shows and movies such as Casablanca and Citizen Kane, as well as more recent hits, like Squid Game and others.

Both mergers clearly involve antitrust considerations.  To purchase Calpine, Constellation was forced to sell six power plants and divest a minority stake in a seventh plant.  This marked the first settlement consent decree that the DOJ has filed in an electricity merger in 14 years.  That might not be the end of the story, however, as Duke Energy has also filed a private antitrust action against the same merger, although the United States Solicitor General has also urged the United States Supreme Court to dismiss the Duke Energy lawsuit.

As for the entertainment industry merger, that might also have some twists left.  Specifically, Paramount has been in the bidding to purchase Warner Bros. and Discovery (WBD), as well, and like Duke Energy, Paramount also appears not ready to just give up following the decision in favor of the Netflix offer by the Board of Directors of WBD.  

One issue that the energy merger did not involve that could affect the entertainment merger is culture.  At this point, the Netflix merger is based on a bid of $27.75 per share, while Paramount’s bid is approximately $30/share.  However, The Writers’ Guild of America (WGA) panned the Netflix offer. The Guild claimed such a combination would reduce competition, push down wages, and likely create a financial powerhouse who could invest in creating deep fake AI characters. (Source). 

Specifically, the entertainment industry has been convulsed over the last few years with cultural issues.  From a legal standpoint, however, if WBD selects Netflix over Paramount because of cultural issues, instead of choosing to maximize shareholder value, that could create a possible “Revlon” violation.  This relates to a 1985 ruling of the Delaware Supreme Court involving the takeover of Revlon, Inc.  The Court then ruled that the obligation of Revlon’s Board of Directors was to seek the best value for shareholders and not to try to rely on applying amorphous and subjective issues, such as “culture.”  At present, Paramount’s initial offer exceeded Netflix’s per share price and was structured as an entire company offer.  By contrast, Netflix only seeks to purchase WBD’s studio and streaming services, leaving WBD’s cable networks (including CNN) and other assets out of the deal.

Regarding the antitrust concerns, if nothing else these issues have the effect of slowing down any potential merger in the entertainment industry.  That, in turn, adversely affects the arbitragers who quickly rush in when any potential merger is announced, hoping to buy up large shares of the company to be acquired as soon as the final deal is consummated, and thereby to profit on the spread between the price they paid and the final purchase price.  Certainly, the arbitragers have been further comforted by the fact that Larry Ellison yesterday personally guaranteed $40.4B to support the Paramount bid. (Source). 

Meanwhile, in the Constellation/Calpine energy transaction, both companies first announced the merger on January 10, 2025.  However, anticipating an end-of-year closing, the regulatory hurdles will have caused a delay of one year, with approval from FERC first coming on July 24 and then followed by approvals from the New York Public Service Commission and the Public Utility Commission of Texas. (Source). 

One final issue involves the actions of the Trump Administration.  The President has stated that he intends to “play an active role” in certain merger determinations, such as for WBD. (Source).  That active role was seen in the Calpine merger, as the Department of Justice worked with Texas Attorney General Ken Paxton to conceptualize and negotiate the eventual settlement.  Mr. Paxton claimed that before the settlement, the merger could have allowed Constellation to manipulate market prices by withholding electricity.  In forcing the divestment of two power plants, government officials believe that concern has now been alleviated.

By contrast, and unlike the energy industry merger, the entertainment industry merger does not have the potential for such real-world impacts to the public.  While the President has not taken sides, he has said that a Netflix takeover “could” raise problems.  He also suggested that whoever takes over WBD also should take over CNN.  Paramount has committed to doing this.  Thus, it is possible the Paramount deal would present fewer antitrust and regulatory issues for the Trump administration. (Source).

Whichever way it goes, and in light of the Trump Administration’s impact on the Calpine acquisition, its decisions likely will set the tone for other potential corporate merger combinations during the remainder of its term.