Netflix has stepped away from its proposed deal to acquire the studio and streaming assets of Warner Bros. Discovery after the WBD board determined that a revised all-cash offer from Paramount Skydance was superior.
Earlier this week, Paramount raised its bid to $31 per share in cash to acquire the entirety of WBD, up from $30 per share. That proposal surpassed Netflix’s earlier agreement to purchase WBD’s studio and streaming businesses for $27.75 per share.
On Thursday, WBD’s board formally declared Paramount’s offer superior. Netflix had four business days to revise its bid. Instead, the streaming giant declined to match the new price.
Breakup Fees and Strategic Stakes
As part of the agreement, Paramount committed to paying the $2.8 billion breakup fee that WBD would have owed Netflix if the prior deal collapsed. Paramount’s proposal also includes a $7 billion breakup fee should the transaction fail to secure regulatory approval.
Paramount’s bid covers the entire WBD portfolio, including pay-TV networks such as CNN, TBS, and TNT, rather than isolating studio and streaming assets.
WBD CEO David Zaslav thanked Netflix leadership for what he described as a rigorous process and expressed confidence that a combined Paramount, Skydance, and WBD would generate significant shareholder value.
Netflix Chooses Discipline Over Escalation
In a joint statement, Netflix co-CEOs Ted Sarandos and Greg Peters said the company remained financially disciplined.
They stated that while the transaction could have created shareholder value and strengthened the entertainment landscape, matching Paramount’s latest offer would no longer make financial sense.
“This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price,” they said.
Netflix had previously granted WBD a seven-day waiver to re-engage with Paramount, allowing shareholders clarity amid competing offers. That move ultimately paved the way for Paramount’s higher bid.
Market Reaction
Investors responded swiftly. Netflix shares rose about 10 percent in extended trading, reflecting relief that the company avoided a potentially expensive bidding war. Paramount shares gained roughly 5 percent. WBD shares slipped around 2 percent.
The outcome closes a prolonged takeover saga marked by revised offers and public maneuvering. It also underscores how streaming leaders weigh scale against balance sheet discipline in an industry still recalibrating post-pandemic.
For Netflix, walking away reinforces a strategy centered on selective expansion rather than transformational acquisitions at any cost. For Paramount Skydance, the agreement positions the company to consolidate legacy media assets at a time when consolidation defines survival.
Photo: Deadline, Source/CNBC
