Marrakech – Netflix declined on Thursday to raise its offer for Warner Bros. Discovery, clearing the path for Paramount Skydance to take over one of Hollywood’s most storied studios in a deal valued at approximately $111 billion, including debt.
The decision came within two hours of Warner Bros. Discovery’s board declaring Paramount’s revised bid of $31 per share “superior” to Netflix’s existing proposal of $27.75 per share. Netflix, which had four business days to respond, chose not to match the offer.
“At the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive,” Netflix co-CEOs Ted Sarandos and Greg Peters said in a joint statement. “This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
The announcement ended a months-long bidding war that had repeatedly shifted momentum between the two rival buyers. Netflix had originally agreed in December to acquire Warner’s studio and streaming assets, including HBO and HBO Max, for roughly $83 billion.
Paramount, led by CEO David Ellison and backed financially by his father Larry Ellison, the billionaire co-founder of Oracle, launched a hostile campaign to take over the entire company – making ten official offers in the process.
Earlier this week, Paramount raised its all-cash offer by $1 per share to $31, covering the entirety of Warner Bros. Discovery, including its pay-TV networks CNN, TBS, TNT, HGTV, and the Discovery+ streaming service.
The revised bid also included a $7 billion regulatory breakup fee and an agreement to cover the $2.8 billion termination fee Warner owed Netflix under their original deal.
Netflix will collect that $2.8 billion breakup payment. The company’s stock surged more than 10% in after-hours trading following the announcement. Paramount shares gained around 5%, while Warner Bros. Discovery shares fell 1.8%.
Warner Bros. Discovery CEO David Zaslav welcomed the outcome. “Once our board votes to adopt the Paramount merger agreement, it will create tremendous value for our shareholders,” he said. “We are excited about the potential of a combined Paramount Skydance and Warner Bros. Discovery.”
If regulators approve the deal, Paramount would add Warner’s film library – including Batman, Superman, Harry Potter, Barbie, and The White Lotus – to its existing catalogue of Top Gun, Titanic, and The Godfather.
HBO Max’s 131.6 million subscribers would join Paramount+’s 78.9 million paid users, creating a combined streaming platform still trailing Netflix’s 325 million subscribers.
The deal, however, faces significant regulatory scrutiny. The US Department of Justice has already initiated a review, and European regulators are expected to follow. California Attorney General Rob Bonta stated Thursday that the merger “is not a done deal,” adding that his office has an open investigation and intends to conduct a rigorous review.
Democratic Senator Elizabeth Warren called the potential combination an “antitrust disaster,” warning that a handful of Trump-aligned billionaires were positioning themselves to control major media assets.
The political dimension has shadowed the entire bidding process. David Ellison attended Trump’s State of the Union address Tuesday. Larry Ellison is a major Republican donor with close ties to the president.
Meanwhile, Trump publicly pressured Netflix days earlier, demanding the removal of board member Susan Rice. Sarandos was at the White House on Thursday for meetings with Attorney General Pam Bondi and Justice Department antitrust officials, though Netflix’s withdrawal was announced the same evening.
The prospect of CNN – long a target of Trump’s public criticism – now potentially falling under Paramount’s ownership has drawn concern across media circles, particularly given Paramount’s installation of Bari Weiss as CBS News editor-in-chief following its Skydance merger.
Warner Bros. Discovery’s board has not formally adopted Paramount’s merger agreement yet. Shareholder approval and clearance from regulators in both the United States and Europe remain outstanding steps before the deal can close.