LOS ANGELES, July 22 -- A US federal judge issued a temporary restraining order Monday halting the $111 billion merger of Paramount Skydance and Warner Bros. Discovery through August 3, delivering the most consequential legal blow yet to a deal that has faced mounting opposition since twelve state attorneys general filed suit earlier this month. The order gives the states time to argue their motion for a preliminary injunction before the court before the pause expires.

The merger, if completed, would create a combined company controlling approximately 75 percent of US theatrical film distribution and 27 percent of basic cable television licensing, according to figures cited in the states' antitrust filing. It would also consolidate strea...