New Jersey and 11 other states argue the deal would reduce competition, raise prices, and leave consumers with fewer entertainment choices.

Paramount Skydance Corp. and Warner Bros. Discovery have agreed to put their proposed $110 billion merger on hold while New Jersey and a coalition of other states pursue an antitrust lawsuit seeking to block the deal, Attorney General Jennifer Davenport announced Friday afternoon.

Under an agreement between the companies, the merger will not move forward until either the end of the trial or June 1, 2027, whichever comes first.

“We are thrilled that, because of our lawsuit, Paramount and Warner Bros. have backed down and won’t move forward with their merger while our case proceeds,” Davenport said in a statement. “This is an enormous win for consumers.”

Davenport said the agreement ensures the companies cannot complete the merger while the case is being litigated.

“We won’t allow corporate monopolists to upend the film and television industry, exploit New Jersey consumers, and drive up their cable bills and the cost of movie tickets,” she said. “Working side by side with my fellow state attorneys general, I will continue to do everything I can to block this unlawful merger and stand up for New Jersey consumers.”

The announcement comes days after a federal judge in the U.S. District Court for the Northern District of California temporarily blocked the merger while considering the states’ request for a preliminary injunction.

New Jersey joined a coalition of 11 other states earlier this month in suing to stop the merger, arguing it would violate federal antitrust law by substantially reducing competition in the entertainment industry.

The states contend the combined company would control roughly one-third of the U.S. theatrical film distribution market and nearly one-third of the nation’s basic cable programming, giving it greater leverage over movie theaters, cable providers, and consumers.

New Jersey has taken an increasingly active role in challenging large corporate mergers. The state is also establishing itself as a major center for film and television production, attracting large studios and expanding tax incentives for the industry.

According to the lawsuit, the merger would substantially lessen competition in three markets: film distribution, blockbuster film distribution, and licensing cable television channels. The attorneys general argue that diminished competition would likely lead to higher prices for consumers, fewer movies and television shows, and lower-quality programming.

The case was filed under Section 7 of the Clayton Act, which prohibits mergers that may substantially lessen competition or create a monopoly.

The coalition challenging the merger includes the attorneys general of New Jersey, California, Arizona, Colorado, Connecticut, Massachusetts, Minnesota, Nevada, New Mexico, New York, Oregon, and Washington.