In a surprising turn of events, Netflix has bowed out of the bidding war for Warner Bros. Discovery despite having reached a prior agreement last year, with Paramount Skydance now in the running to acquire the studio in its entirety.
As reported by Variety, Netflix formally declined to increase its offer for Warner Bros. Discovery following a “superior proposal” made by Paramount Skydance compared to the former deal made in December 2025, which saw Netflix acquiring both Warner Bros. and HBO Max for US$82.7 billion.
“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” said Netflix co-CEOs Ted Sarandos and Greg Peters in a joint statement. “However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid.”
“Netflix is a great company and throughout this process Ted, Greg, Spence and everyone there have been extraordinary partners to us. We wish them well in the future,” said Warner Bros. Discovery CEO David Zaslav on the whirlwind turn of events. “Once our Board votes to adopt the Paramount merger agreement, it will create tremendous value for our shareholders. We are excited about the potential of a combined Paramount Skydance and Warner Bros. Discovery and can’t wait to get started working together telling the stories that move the world.”
The now-dead Netflix deal was valued at US$27.75 per Warner Bros. Discovery share, with a total enterprise value of US$82.7 billion (equity value of US$72.0 billion). At the time, Paramount’s all-cash, US$30 per share offer for the entirety of the company was rejected by the Warner Bros. Discovery board, but when the former upped the proposal to US$31 per share, or around US$111 billion in total, it was an offer too enticing for Warner Bros. to pass up.
Other parts of Paramount’s new bid include raising the regulatory breakup fee to US$7 billion in the event the transaction does not close due to regulatory matters, with the studio also promising to pay the US$2.8 billion termination fee Warner Bros. Discovery would have been required to pay Netflix to end their existing deal.
Paramount’s merger with Warner Bros. is set to combine two major Hollywood studios, alongside two news networks, CNN and CBS, and two streaming platforms, HBO Max and Paramount+. This also serves to balance the scales in the competitive streaming landscape, as the studio’s respective streamers currently lack the subscriber base of rivals like Netflix, and having them both operate under the same umbrella is sure to prove beneficial in an era where traditional networks continue to see a gradual decline.
Kevin is a reformed PC Master Race gamer with a penchant for franchise “duds” like Darksiders III and Dead Space 3. He has made it his life-long mission to play every single major game release – lest his wallet dies trying.
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