Netflix Ditches Warner Bros. Discovery Deal After Paramount’s Offer Deemed Superior

Washington: Netflix has withdrawn from its proposed deal to acquire Warner Bros. Discovery’s studio and streaming assets after the company’s board determined that a revised all-cash offer from Paramount Skydance was superior.

Earlier this week, Paramount raised its bid to purchase the entirety of Warner Bros. Discovery (WBD) to $31 per share, up from $30 per share. The offer covers the full company, including its pay-TV networks such as CNN, TBS and TNT.

The improved proposal displaced Netflix’s earlier agreement to acquire WBD’s studio and streaming businesses at $27.75 per share. Under the deal terms, Netflix had four business days to revise its offer after Paramount’s bid was deemed superior.

Instead of increasing its proposal, Netflix chose to step away.

In a joint statement, Netflix co-CEOs Ted Sarandos and Greg Peters said the company remained disciplined in its approach.

“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. However, at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match,” they said.

Paramount’s latest bid includes a $7 billion breakup fee if the merger fails to receive regulatory approval. The company also agreed to cover the $2.8 billion breakup fee that WBD would have owed Netflix had the original agreement collapsed.

Warner Bros. Discovery CEO David Zaslav thanked Netflix for its engagement throughout the process.

“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,” Zaslav said.

The decision brings an end to months of competing bids and negotiations. Paramount had previously pursued a hostile takeover approach before revising its offers in recent weeks.

Market reaction was swift. Netflix shares surged roughly 10% in extended trading, while Paramount stock gained about 5%. Shares of Warner Bros. Discovery fell approximately 2%.

Last week, Netflix granted WBD a seven-day waiver allowing the company to reopen discussions with Paramount. Sarandos said at the time the move was intended to provide clarity for shareholders amid ongoing public speculation surrounding Paramount’s competing offers.

Sarandos attended meetings at the White House on Thursday to discuss the proposed transaction, underscoring the deal’s broader industry significance.

While Netflix stated it believed it could have been a strong steward of Warner Bros.’ brands, executives emphasized the acquisition was never essential.

“This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price,” the company said.

The focus now shifts to regulatory review and shareholder approval of Paramount Skydance’s proposed merger with Warner Bros. Discovery, which would reshape the competitive landscape of the global media and streaming industry.