Netflix Steps Aside as Paramount Offer For Warner Bros Deal Is Labelled Superior
Netflix has pulled out of the race to buy Warner Bros. Discovery, leaving Paramount Skydance in the lead to take over one of Hollywood’s biggest studios in a deal valued at about $111bn (£82bn) including debt.
Warner’s board said Paramount’s revised $31-per-share all-cash offer for the entire company was “superior” to Netflix’s earlier proposal of $27.75 per share for its studio and HBO Max streaming assets. Netflix had been given a short window to respond but chose not to increase its bid.
In a statement, co-CEOs Ted Sarandos and Greg Peters said, “The transaction we negotiated would have created shareholder value with a clear path to regulatory approval.” They added that “at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive,” and described the takeover as “a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
The move ends months of back-and-forth between the streaming giant and Paramount, which had launched a hostile bid late last year before repeatedly sweetening its offer. Paramount’s final proposal also includes a $7bn breakup fee if regulators block the merger and a commitment to cover the $2.8bn fee Warner would owe Netflix for walking away from their earlier agreement.
Warner Bros. Discovery chief executive David Zaslav thanked Netflix for its role in the process, saying, “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.” He added that once the board formally approves the Paramount deal, it “will create tremendous value for our shareholders” and said the company was “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.”
If approved, Paramount Skydance would take control of Warner’s vast entertainment empire, including HBO Max, its film studio and cable networks such as CNN. The combined company would bring together major franchises from both sides, reshaping the competitive landscape in Hollywood.
But the deal still faces regulatory scrutiny in the US and Europe. California Attorney General Rob Bonta warned that the merger “is not a done deal,” noting that his office has an open investigation. Federal regulators are also expected to examine competition concerns and questions about political influence.
Paramount is backed by billionaire Larry Ellison, a prominent supporter of President Donald Trump. That connection, along with the potential consolidation of major news brands like CNN and CBS News under one umbrella, has raised eyebrows in media and political circles.
Markets reacted quickly. Netflix shares jumped sharply in after-hours trading, with investors appearing relieved that the company avoided a costly bidding war. Paramount stock also rose, while Warner Bros. Discovery shares dipped slightly below the $31 offer price.
For now, Paramount Skydance appears closest to sealing the deal. But with shareholder votes and regulatory reviews still ahead, the final chapter in this Hollywood takeover drama has yet to be written.
