Paramount Skydance has emerged victorious in a months-long battle to acquire Warner Bros. Discovery after Netflix declined to raise its offer for the Hollywood studio. The outcome marks one of the largest media mergers in history and a decisive turning point in the global streaming wars.
Netflix Withdraws, Paramount Declared Superior Bidder
Warner Bros. Discovery announced that Paramount Skydance's revised $31-per-share all-cash offer constituted a superior proposal to Netflix's bid of $27.75 per share for the company's streaming and studio assets.
In a statement, Netflix confirmed it would not match the revised offer, saying the deal was "no longer financially attractive at the required price."
"We've always been disciplined," Netflix said, adding that it was declining to match Paramount's latest bid.
Following the announcement, Netflix shares jumped more than 10%.
Warner CEO David Zaslav said the combination of Paramount, Skydance, and Warner Bros. Discovery would create "tremendous value" for shareholders. The Warner Bros. board still needs to formally terminate its agreement with Netflix and adopt Paramount's merger proposal.
Why Netflix Walked Away from the Warner Bros. Deal
According to sources familiar with the matter, Netflix's advisers recommended withdrawing from the bidding war because the economics no longer made sense.
Netflix co-CEO Ted Sarandos had previously emphasised the company's disciplined approach to acquisitions, signalling reluctance to overpay. One adviser described the situation as competing against a bidder willing to pay what Netflix viewed as an irrational premium — a reference to billionaire Larry Ellison, whose family backs Paramount CEO David Ellison.
Rather than escalate the bidding further, Netflix chose to step aside.
Paramount had maintained an aggressive pursuit of Warner Bros., even launching a hostile campaign before bringing the company back to negotiations with a higher cash offer.
How Paramount Financed the $110.9 Billion Acquisition
A major factor behind Paramount's winning position: the sheer scale of its financial backing.
The Ellison Trust is committing $45.7 billion in equity, backed by Larry Ellison, with additional funds pledged if needed to meet solvency requirements. Major banks including Bank of America Merrill Lynch, Citi, and Apollo are providing $57.5 billion in debt financing.
Roughly $24 billion in additional backing comes from Gulf sovereign wealth investors, including Saudi Arabia's Public Investment Fund — giving the deal significant Middle Eastern financial weight.
Paramount also increased its regulatory termination fee from $5.8 billion to $7 billion and agreed to cover the $2.8 billion fee Warner Bros. would owe Netflix for exiting their agreement.
Regulatory Scrutiny Ahead for Hollywood Merger
The proposed Paramount Skydance Warner Bros. Discovery acquisition would unite two major Hollywood studios, two streaming platforms (HBO Max and Paramount+), and two major news operations (CNN and CBS) under a single corporate umbrella.
Such consolidation is expected to attract regulatory scrutiny in Washington, individual U.S. states, and potentially Europe.
California Attorney General Rob Bonta confirmed his office has an open investigation into the deal and intends to conduct a rigorous review. Analysts suggest federal approval may be likely given the current political climate, but state-level challenges remain possible.
What the Merger Means for Hollywood
If approved, the merger would fundamentally reshape the entertainment landscape — consolidating film studios, streaming platforms, and news networks under one company at a scale the industry has not seen in decades.
Paramount Skydance's victory marks a decisive shift in the battle for Warner Bros. Discovery, while Netflix's disciplined exit has reassured its own investors that the streaming giant will not overpay for assets.
With regulatory hurdles still ahead, the next chapter in this Hollywood power play will unfold in courtrooms and government offices rather than bidding rooms.
