Netflix walks away from Warner Bros bid, Paramount Skydance moves closer to mega-merger

Paramount Skydance emerged as the winner in the months-long bidding war to acquire Warner Bros. Discovery after Netflix declined to raise its offer.

Earlier on Thursday, Warner Bros said Paramount’s sweetened offer of $31 per share topped Netflix’s $27.75-per-share bid for its streaming and studio assets.

Netflix co-CEOs Ted Sarandos and Greg Peters said the company would not match Paramount Skydance’s latest proposal, describing the deal as no longer “financially attractive” at the higher price.

“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,” the executives said.

Netflix said the acquisition had always been a “nice to have” at the right price, not a “must have” at any price.

Paramount had mounted an aggressive pursuit of Warner Bros, including a hostile campaign that brought the studio back to the negotiating table last week with the prospect of a higher cash offer.

Sarandos had earlier hinted that the streaming major would not substantially raise its bid.

In a February 20 interview with Fox News’ Liz Claman, he described Netflix as “very disciplined buyers.”

Following the announcement that it would not increase its offer, Netflix shares surged more than 10%.

The company said it would continue investing heavily in content, earmarking around $20 billion this year for films and series.

“Consistent with our capital allocation policy, we’ll also resume our share repurchase program,” it added.

Indian investor and film producer Ronnie Screwvala praised the decision in a post on X, saying Netflix had “dodged more than a bullet”.

“Always admired @reedhastings and all @netflix for their incredible FOCUS while scaling and keeping creativity and innovation at the core - and glad to see it can go back to what it does incredibly well - am sure no regrets today or long term in walking away …

A merger between Paramount and Warner Bros would combine two major Hollywood studios, two streaming platforms and two news operations, CNN and CBS.

The proposed tie-up is expected to draw antitrust scrutiny in Washington, several US states including California, and overseas markets.