Netflix withdraws from Warner Bros agreement, opting not to compete with Paramount Skydance's increased bid

Image credit: Netflix/Warner Bros Discovery

Netflix has withdrawn its acquisition proposal for Warner Bros Discovery following Paramount Skydance's increased cash bid of $31 per share.

Paramount will handle the $2.8 billion fee for terminating Warner Bros Discovery's initial merger agreement with Netflix.

In early October, Paramount enhanced its $30-per-share bid, incorporating incentives such as a termination fee, an incremental pay fee, and coverage for debt financing, which exceeded the criteria for engaging Warner Bros Discovery's board with its bid.

Warner Bros Discovery's board found Paramount's updated offer more favorable than Netflix's. Consequently, Netflix decided against matching Paramount's terms, deeming the cost unattractive.

Netflix's co-CEOs, Ted Sarandos and Greg Peters, expressed that they believed their acquisition would have been advantageous for Warner Bros' renowned brands and beneficial for the U.S. entertainment sector, though it was always contingent on the right price.

They added: "Our business remains robust, with organic growth driven by our exceptional streaming platform. This year, we plan to allocate roughly $20 billion to premium movies and series and broaden our entertainment range. In line with our financial strategies, we will continue our share repurchase initiative."

Back in October 2025, Warner Bros Discovery revealed it was "considering selling some or all of its media assets."

On December 5, Netflix proposed to acquire Warner Bros Discovery for about $82.7 billion, offering per share payments comprising $27.75 in cash and $4.50 in Netflix stock. This deal would include Warner Bros Discovery's film studio, streaming platforms, and gaming sector, but not its cable channels. In June 2025, Warner Bros Discovery split into two distinct parts, separating its Streaming & Studios from Global Networks.

Paramount launched a hostile takeover move valued at $108.4 billion on December 8, with an all-cash offer of $30 per share. Despite this, Warner Bros Discovery advised against accepting Paramount’s proposal as another assessment confirmed it was "subpar compared to Netflix's merger," leading to its dismissal by the board.

Subsequently, Paramount filed a legal suit against Warner Bros Discovery, seeking disclosure of Netflix's bid terms in court.