Paramount Skydance has secured a settlement with 12 US states that attempted to block its $110billion (£80billion) takeover of rival film studio Warner Bros Discovery.

Bosses at Paramount, whose hits include The Godfather, Titanic and Top Gun, agreed a number of concessions with opponents led by California as it cleared one of the last big hurdles to a deal that will reshape Hollywood.

The settlement includes the creation of independent editorial boards for CNN, which is owned by Warner Bros, and Paramount’s own television network CBS.

Paramount – which saw off a rival offer for Warner Bros from Netflix – has also agreed to pay financial penalties if it does not meet its pledge of releasing 30 new films a year.

The settlement follows months of regulatory and legal wrangling over a deal that would dramatically concentrate power across Hollywood's film, TV, streaming and news businesses.

By securing concessions aimed at preserving newsroom independence and maintaining movie production, Paramount appears to have addressed some of the concerns, bringing the two companies closer to completing a merger that will create one of the world's largest media and entertainment groups.

Shares of Paramount rose 8 per cent while Warner Bros, whose slate of films ranges from The Wizard of Oz and Casablanca to Barbie and Harry Potter, gained more than 10 per cent.

Dan Coatsworth, head of markets at AJ Bell, said: ‘A takeover saga which has had more twists and turns than your average Mission: Impossible film looks to be inching closer to a resolution.

‘Assuming Paramount can get the deal over the line it will become a materially bigger beast in a competitive entertainment market, having seen off Netflix’s rival bid earlier this year.

‘Though whether bigger will translate into better remains to be seen, given more than a fair share of blockbuster mergers have bombed in the past.’

While Donald Trump’s administration cleared the deal, a coalition of 12 state attorneys general, led by California's Rob Bonta, sued in July to block the merger, arguing it would reduce competition and create a media behemoth with the power to raise prices in movies and television.

Competition regulators in other jurisdictions globally, including the European Union and Britain, have already cleared the deal.

A settlement with the states will help Paramount avoid a daily $7million (£5.2million) ‘ticking fee’ it owes Warner Bros shareholders for each day the deal does not close past September 30.

But it does not fully remove Paramount's obstacles to acquiring Warner Bros.

The Writers Guild of America has also sued to stop the deal, arguing it would decrease pay and worsen working conditions for film and television writers.

The union warned in July that a combined Paramount-Warner Bros entity would have ‘both the incentive and the ability to lower costs by suppressing writers' wages and reducing output’.

Morningstar analyst Matthew Dolgin said: ‘The final hurdle will be some trade unions that also have a similar lawsuit outstanding, but they'll be hard pressed to hold up this deal. I think the unions would have a very low probability of winning their case, so I'd expect that to get settled also.’