Netflix Withdraws from Warner Bros Discovery Takeover Battle as Paramount Offer Declared Superior
In a surprising twist to the high-stakes corporate takeover saga, Netflix has officially withdrawn its bid for Warner Bros Discovery (WBD), paving the way for Paramount Skydance to potentially secure the deal. The streaming giant refused to raise its offer on value grounds, responding to Paramount's superior proposal that has reshaped the competitive landscape.
The Bidding War and Financial Details
Netflix had been in pole position to acquire Warner's studio and HBO Max streaming businesses with an offer of $27.75 per share, valuing these divisions at approximately $83 billion including debt. However, Paramount submitted a final offer earlier this week of $31 per share for the entire WBD business, concluding a ping-pong process of sweetened bids that valued the company at $111 billion including debt.
Warner's board declared on Thursday night that while it continued to recommend Netflix's offer, it now considered Paramount's proposal as "superior"—marking the first hint of support for what was initially declared a hostile bidder when the saga began back in December.
Netflix's Strategic Withdrawal
Netflix responded by pulling out of the process just hours later, declaring that a deal was "no longer financially attractive." The co-CEOs Ted Sarandos and Greg Peters stated: "We believe we would have been strong stewards of Warner Bros.' iconic brands. But this transaction was always a 'nice to have' at the right price, not a 'must have' at any price."
This decision underscores Netflix's disciplined approach to acquisitions, prioritizing financial prudence over aggressive expansion despite the strategic appeal of Warner's content library.
Paramount's Path Forward and Industry Implications
The withdrawal does not yet guarantee Paramount's success, as the board has yet to give its formal blessing. However, WBD has shifted its tone, with CEO David Zaslav voicing support for the bid for the first time, declaring that Paramount's offer "will create tremendous value" and expressing excitement about "the potential of a combined Paramount Skydance and Warner Bros Discovery."
Key hurdles remain, including approval from Warner shareholders and regulators, with the latter facing competition concerns and questions over political influence. If successful, a Paramount-Warner combination would encompass two of Hollywood's five legacy studios, creating a content powerhouse.
Content and Political Considerations
Beyond financial aspects, the takeover raises significant content and political questions. Warner's portfolio includes iconic franchises like Harry Potter, Superman, and Barbie, along with hit TV series such as Succession, which would join Paramount's library featuring titles like Top Gun and The Godfather, plus the Paramount+ streaming service.
Moreover, if Paramount Skydance succeeds, it would own news channels CNN and CBS News, sparking concerns about concentrating news services within a small number of companies linked to allies of former US President Donald Trump. Paramount's chair and CEO, David Ellison, is the son of billionaire Larry Ellison, a Trump ally who has provided tens of billions in funding guarantees for the WBD bid.
This development highlights the intense competition in the streaming industry, where content acquisition and market consolidation are driving billion-dollar deals with far-reaching implications for media diversity and corporate strategy.
