LOS ANGELES — Paramount Skydance and the 12 states suing to block its proposed acquisition of Warner Bros. Discovery are engaged in advanced settlement discussions, according to two people familiar with the negotiations. The talks include possible conditions on the merger, which would unite two major Hollywood companies in a deal valued at $111 billion. California Attorney General Rob Bonta’s office is leading the multistate challenge, filed in July after regulators in the United States and more than 60 other countries and jurisdictions approved the transaction. The U.S. Department of Justice approved it in June. The negotiations follow weeks of public pressure on Bonta from California Gov. Gavin Newsom and Los Angeles Mayor Karen Bass, who have urged the attorney general to resolve the case. Bonta’s office said potential settlement discussions are confidential and declined to confirm whether negotiations are taking place or to discuss their substance. Paramount declined to comment. Among the ideas under discussion are keeping Paramount and Warner Bros. movie studios operationally separate for some period after the deal closes. The negotiations have also addressed possible independent monitoring of CNN’s content and other safeguards, according to reports of the talks. Bonta’s lawsuit argues that the merger would substantially reduce competition in three markets: wide-release theatrical films, highly anticipated top-grossing films and licensing for basic-cable channels. Court-supervised settlement talks are scheduled for October. The proposed combination would merge Paramount’s streaming service with HBO Max, creating a platform with roughly 200 million subscribers. That would give the company a larger base from which to compete with Netflix, which has more than 325 million subscribers worldwide. Warner Bros. Discovery also owns a major film and television studio and CNN. The deal has raised particular concern in Southern California, where Paramount’s historic studio operations are tied to thousands of creative, production and support jobs. Hollywood observers have warned that consolidating the companies could reduce opportunities for actors, writers and other workers and lead to substantial layoffs. Paramount Chief Operating Officer Andy Gordon has said the company expects more than $6 billion in savings, or “synergies,” within three years of closing the transaction. Paramount has also considered moving some operations out of California. The company has sought about 400,000 square feet of office space in Nashville for a potential relocation in two to three years. Bonta has characterized the company’s posture toward leaving California as a form of “blackmail.” David Ellison, Paramount’s chief executive, has pledged that the combined company would release at least 30 films annually and expand its television production. Those commitments are intended to reassure workers and the entertainment industry that consolidation would not mean a retreat from filmmaking, though the proposed merger’s impact would ultimately depend on enforceable conditions rather than promises alone. The transaction faces a financial deadline as the legal challenge continues. If it has not closed by October, Paramount would owe approximately $7 million for each additional day before completion.