Netflix has officially stepped out of the race to acquire Warner Bros. Discovery (WBD), leaving Paramount Skydance as the frontrunner in this high-stakes takeover battle.
The streaming giant had previously offered $27.75 per share for Warner’s studio operations and HBO Max streaming service, valuing the assets at around $83 billion (£61.6 billion), including debt. However, Paramount Skydance raised the stakes with a final bid of $31 per share for the entire WBD group, valuing the company at approximately $111 billion (£82.4 billion), including debt.
Although Warner’s board initially backed Netflix’s proposal, they acknowledged on Thursday that Paramount’s offer was “superior.” This marked the first sign of support for Paramount, which had previously been seen as a hostile bidder.
Shortly after this announcement, Netflix confirmed it would not increase its bid, stating the deal was “no longer financially attractive.” Co-CEOs Ted Sarandos and Greg Peters explained in a joint statement: “This was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
The Deal Isn’t Done Yet
Despite Netflix’s withdrawal, the merger is far from finalized. Warner’s board has yet to formally approve Paramount’s offer. CEO David Zaslav described the proposal as one with the potential to create “tremendous value.” However, the deal still requires approval from shareholders and regulators, with competition concerns and political scrutiny expected to play a significant role in the review process.
If successful, the merger would bring major media assets—including CNN and CBS News—under one corporate umbrella. This consolidation is likely to spark further debate about the growing concentration of power in the U.S. media industry.
Paramount Skydance’s Big Move
Paramount Skydance, led by David Ellison (son of billionaire Larry Ellison, who is financing the bid), stands to gain a massive portfolio of iconic franchises. These include Warner’s Harry Potter, Superman, and Barbie, alongside Paramount’s Top Gun, The Godfather, and the Paramount+ streaming platform.
Market Reaction
Investors reacted quickly to the news. Netflix shares jumped 8.5% in after-hours trading, as the company’s decision to avoid a costly acquisition was seen as a sign of financial discipline. Paramount’s stock rose 6.2%, while WBD shares dipped nearly 2% to $28.80—below Paramount’s $31 offer price.
Analysts praised Netflix’s move, interpreting it as a focus on profitability, pricing power, and operational performance rather than a retreat.
What’s Next?
If Paramount Skydance succeeds, the merger would unite two of Hollywood’s most storied studios, creating a powerhouse of entertainment. For now, the bidding war seems to have ended, but regulatory and shareholder approvals remain significant hurdles. If cleared, this could become one of the biggest media mergers in recent years.
