Paramount Skydance has emerged victorious in the high-stakes contest to acquire Warner Bros Discovery, after Netflix declined to raise its offer and formally walked away from the deal.
The decision triggered a sharp rally in Netflix’s stock, with shares jumping more than 10% as investors welcomed the company’s renewed capital discipline.
In a statement on Thursday, Netflix said it would not match Paramount Skydance’s revised $31-per-share offer, citing valuation concerns.
What they are saying
Netflix, in the statement, said it pulled out because it no longer found the deal attractive.
- “We’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive,” the streaming giant noted.
With Netflix stepping aside, Warner Bros Discovery’s board is now expected to terminate the earlier agreement with Netflix and formally adopt Paramount Skydance’s proposal.
Warner Bros CEO David Zaslav described the prospective merger as a value-enhancing move for shareholders, saying the combination would unlock new opportunities in storytelling and global distribution.
The outcome caps months of intense negotiations and boardroom drama. Paramount Skydance had mounted an aggressive campaign to wrest Warner Bros from Netflix, including a hostile push that ultimately drew Warner back to the negotiating table.
Earlier on Thursday, Warner Bros confirmed that Paramount’s $31-a-share bid was superior to Netflix’s $27.75 offer for its streaming and studio assets.
Sources close to the process said Netflix’s advisers had urged management to bow out, arguing that the economics no longer stacked up. Netflix co-CEO Ted Sarandos had hinted at this stance earlier in the month, stressing that Netflix remained a “very disciplined buyer.”
One adviser described the bidding war as futile, pointing to the willingness of billionaire backers to pay a premium that Netflix considered irrational.
That billionaire influence comes from Larry Ellison, whose Ellison Trust is anchoring Paramount Skydance’s bid. The trust has committed $45.7 billion in equity, up from $43.6 billion previously, while Ellison has also pledged additional support to meet bank solvency requirements. Debt financing of $57.5 billion is being arranged by a syndicate led by Bank of America Merrill Lynch, Citigroup and Apollo Global Management.
Despite the financial firepower, regulatory hurdles loom large.
The merger would unite two major Hollywood studios, two streaming platforms, HBO Max and Paramount+ and two major news operations, CNN and CBS.
Analysts warn that antitrust scrutiny is likely in Washington, several U.S. states and Europe. California Attorney General Rob Bonta has already confirmed an open investigation, stressing that regulatory approval is far from guaranteed.
To bolster deal certainty, Paramount Skydance has increased the termination fee payable if regulators block the merger to $7 billion and agreed to cover the $2.8 billion break fee Warner Bros would owe Netflix. Activist investor Ancora Holdings, which holds a small stake in Warner Bros, welcomed Netflix’s exit, saying it clears the path for higher shareholder value and a more credible route to regulatory approval.
Backstory
Netflix’s eventual decision to exit the race followed a last-ditch attempt earlier in the year to keep Warner Bros Discovery within its grasp.
In January 2026, the streaming giant revised its proposed $83 billion cash-and-stock deal into an all-cash offer, a move widely seen as a tactical response to Paramount Skydance’s escalating and increasingly hostile bid.
- Under the revised proposal, Netflix offered $27.75 per share in cash for Warner Bros Discovery’s studio and streaming assets, including HBO Max.
- The shift eliminated Netflix equity from the deal structure, replacing its earlier offer of $23.25 in cash plus $4.50 in Netflix shares per WBD share.
- At the time, Paramount launched its $108.4 billion hostile bid for Warner Bros Discovery, challenging Netflix’s $72 billion acquisition of the media company.
The move positioned Paramount, run by David Ellison, as a direct competitor to Netflix in the effort to control Warner Bros’ film, television, and streaming assets.
