Paramount Skydance Corp. has sealed a $111 billion acquisition of Warner Bros. Discovery Inc., prevailing over Netflix Inc. in a protracted contest by offering $31 per share in cash for the full company, including its pay-TV networks.
The agreement caps a five-month saga marked by escalating bids, legal threats, and high-level lobbying in Washington. Paramount CEO David Ellison, with support from his father, Oracle chairman Larry Ellison, navigated rejections and a near-victory for Netflix before submitting a sweetened proposal last week that included covering a $2.8 billion breakup fee owed to Netflix and a $7 billion penalty if regulators block the merger, per Bloomberg.
Netflix, which had a December pact for Warner Bros.’ studio and streaming assets at $27.75 per share totaling $82.7 billion, declined to counter after a seven-day waiver to reopen talks.
“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Netflix co-CEOs Ted Sarandos and Greg Peters said in a statement, per CNBC. “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.”
They added, “We believe we would have been strong stewards of Warner Bros.’ iconic brands, and that our deal would have strengthened the entertainment industry and preserved and created more production jobs in the U.S. But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
Warner Bros. CEO David Zaslav praised Netflix’s team but hailed the Paramount match.
“Once our board votes to adopt the Paramount merger agreement, it will create tremendous value for our shareholders,” Zaslav said, according to CNBC. “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.”
The merger unites Paramount’s film studio, CBS, and MTV with Warner Bros.’ HBO, CNN, TBS, and TNT, forming a vast media conglomerate amid streaming shifts. Legacy players like these have struggled against Netflix’s 325 million subscribers, prompting Warner Bros. to seek buyers in October after Paramount’s initial overture in September.
Tensions peaked with Paramount’s tender offer, threats of proxy battles, and accusations of an unfair process, while Zaslav ignored Ellison’s outreach. A last-minute Paramount adjustment, backed by $57.5 billion in financing from Bank of America, Citigroup, and Apollo Global Management — plus Larry Ellison’s $45.7 billion equity guarantee — swayed the board.
Market response was mixed.
Netflix shares surged as much as 10% in after-hours trading, reflecting relief at avoiding overpayment and plans for $20 billion in content spending. Paramount rose 5%, while Warner Bros. dipped 2%, ending speculation of further escalation. The stock has climbed 130% since the pursuit surfaced.
Ancora Holdings called it a “win-win for shareholders and the industry,” noting Netflix’s exit ensures “meaningfully more cash and a truly viable path to government approvals.”
Regulatory hurdles still loom, with a Senate Judiciary hearing set for March 4.
Sen. Cory Booker (D-NJ) invited Ellison, while Sen. Elizabeth Warren (D-MA) decried it as “an antitrust disaster threatening higher prices and fewer choices for American families.”
Both Ellison and Sarandos met administration officials this week; Ellison attended the State of the Union as Sen. Lindsey Graham’s guest.
Sarandos, exiting the White House Thursday, said: “I’m not doing press today.”