Netflix has withdrawn from the bidding race for Warner Bros. Discovery (WBD), effectively clearing the way for Paramount Skydance to take the lead in the high-profile takeover battle.
The streaming company had previously offered $27.75 per share for Warner’s studio division and the HBO Max streaming platform, valuing those assets at about $83 billion (£61.6 billion), including debt.
Paramount Skydance, however, submitted a higher final bid of $31 per share for the entire WBD group, placing the company’s valuation at roughly $111 billion (£82.4 billion), including debt.
Although Warner’s board had continued to back Netflix’s proposal, it acknowledged on Thursday that Paramount’s offer was now “superior,” signalling a shift in favour of the once-hostile bidder.
Shortly after that assessment, Netflix confirmed it would not raise its bid, saying the deal was “no longer financially attractive.” Co-CEOs Ted Sarandos and Greg Peters said in a joint statement: “This was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
Despite Netflix’s exit, the takeover is not yet final. Warner’s board has not formally approved Paramount’s offer, though CEO David Zaslav described the proposal as one capable of generating “tremendous value.” Any agreement would still need shareholder and regulatory approval, with competition and political scrutiny expected to play a significant role in the review process.
If completed, the merger would bring major media brands such as CNN and CBS News under one corporate umbrella, fuelling further debate about consolidation in the US news industry.
Paramount Skydance is chaired by David Ellison, son of billionaire Larry Ellison, who is backing the financing of the bid.
Markets reacted swiftly. Netflix shares rose 8.5% in after-hours trading, suggesting investor relief at the company avoiding a costly acquisition. Paramount’s stock gained 6.2%, while WBD shares fell nearly 2% to $28.80, below Paramount’s $31 offer price.
Analysts said Netflix’s decision reflected financial discipline rather than retreat, allowing investors to refocus on the company’s profitability, pricing strength and operational performance.
Should Paramount Skydance succeed, the combined company would unite two major Hollywood studios, bringing together franchises such as Harry Potter, Superman and Barbie with Paramount’s portfolio, including Top Gun and The Godfather, alongside the Paramount+ streaming service.
For now, the bidding war appears to have subsided, but regulatory and shareholder hurdles remain before what could become one of the largest media mergers in recent years is finalised.
