Netflix has decided to walk away from its previously negotiated $82.7 billion offer for Warner Bros. Discovery’s studio and streaming assets, citing that the price required to match Paramount Skydance’s revised $111 billion bid was no longer financially attractive.
The Warner Bros. Discovery board declared Paramount Skydance’s $31‑per‑share proposal a “Company Superior Proposal,” and as part of the original agreement Netflix will receive a $2.8 billion breakup fee paid by Warner Bros. Discovery, which Paramount has agreed to cover.
"The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. 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," said Netflix co‑CEOs Ted Sarandos and Greg Peters.
"We are pleased WBD's Board has unanimously affirmed the superior value of our offer, which delivers to WBD shareholders superior value, certainty and speed to closing," said Paramount Skydance Chairman and CEO David Ellison. Warner Bros. Discovery CEO David Zaslav also expressed enthusiasm about the outcome.
The decision preserves Netflix’s liquidity and allows the company to focus on its core streaming and content strategy, avoiding a costly merger that could strain its capital structure. Paramount Skydance, backed by financing from Larry Ellison and Middle Eastern sovereign wealth funds, will acquire the entire Warner Bros. Discovery company, reshaping the media landscape. Both deals faced potential regulatory scrutiny, with Netflix’s proposal raising antitrust concerns and Paramount Skydance offering a $7 billion termination fee to address such issues.
Investors responded positively, citing Netflix’s disciplined capital allocation and the $2.8 billion breakup fee as a financial cushion. Analysts at Raymond James suggested that share repurchases could be a primary use of the capital, reinforcing confidence in Netflix’s strategy.
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