Netflix Withdraws from Warner Bros. Discovery Acquisition as Paramount Skydance Leads Bidding
Netflix has withdrawn from the competition to acquire Warner Bros. Discovery and confirmed that it will not match the latest offer submitted by Paramount Skydance.
The decision opens the possibility of a major merger with the potential to reshape the global entertainment and media industry landscape.
Previously, in December, Netflix had agreed to purchase a stake in Warner Bros. Discovery at $27.75 per share, equivalent to approximately $82.7 billion. However, Paramount Skydance subsequently entered the fray with a cash offer of $30 per share to acquire the entire company, before eventually raising its offer to $31 per share.
In a joint statement, Netflix Co-CEOs Ted Sarandos and Greg Peters stated that the agreement they had previously negotiated was believed to deliver added value to shareholders and had clear regulatory approval prospects. Nevertheless, they affirmed that at Paramount Skydance’s latest offered price, the transaction no longer made financial sense, prompting Netflix to withdraw.
To date, Paramount Skydance has not issued an official response to Netflix’s decision.
Warner Bros. Discovery is known as the owner of various film studios and streaming platforms, as well as several cable television channels including CNN, Food Network, HBO, HGTV, TBS, TNT, and Turner Classic Movies.
The proposed merger between Paramount Skydance and Warner Bros. Discovery still requires approval from federal antitrust authorities. However, industry players and members of parliament have expressed concerns that the consolidation of two major Hollywood studios could reduce market competition, according to reports.
On the other hand, Paramount Skydance has argued that if Netflix were to acquire Warner Bros. Discovery—including the HBO Max platform—the risk of rejection from competition regulators would also be substantial.
As part of its bid enhancement, Paramount Skydance stated it is prepared to pay a termination fee of $7 billion should the acquisition fail due to regulatory obstacles.