Netflix has withdrawn its bid to acquire a stake in Warner Bros. Discovery, effectively clearing the path for Paramount Skydance’s $111 billion takeover offer, Warner Bros. Discovery announced Thursday.
The decision by Netflix follows Warner Bros. Discovery’s board informing the streaming giant that Paramount’s revised offer of $31 per share constituted a “superior proposal,” according to a statement released by Netflix co-CEOs Ted Sarandos and Greg Peters. Netflix had previously agreed to a deal valuing Warner Bros. Discovery at $27.75 a share, or $82.7 billion, in December.
“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Sarandos and Peters said. “However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid.”
Warner Bros. Discovery CEO David Zaslav expressed enthusiasm for the potential merger with Paramount Skydance. “We are excited about the potential of a combined Paramount Skydance and Warner Bros. Discovery and can’t wait to get started working together telling the stories that move the world,” Zaslav stated.
The proposed merger, which would unite Paramount Skydance – owner of CBS News – with Warner Bros. Discovery, encompassing networks like CNN, HBO, and Food Network, is expected to face scrutiny from federal antitrust enforcers. Paramount Skydance executives have argued that the combination would benefit consumers and revitalize the entertainment industry, which has been grappling with the effects of the pandemic. However, entertainment industry groups and lawmakers have voiced concerns about the potential for reduced competition.
Netflix’s withdrawal marks a significant shift in the ongoing battle for control of Warner Bros. Discovery. The streaming giant had initially positioned itself as a strong contender, but ultimately deemed the financial implications of matching Paramount Skydance’s offer unsustainable. The outcome leaves Paramount Skydance poised to complete its acquisition, pending regulatory approval.
