Paramount wins Warner Bros. Discovery for $111 billion; Netflix withdraws from bidding war
Paramount Skydance secured control of Warner Bros. Discovery after Netflix withdrew from the competition. Regulatory approval in the U.S. and Europe remains pending.
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Paramount Skydance won a boardroom battle for control of Warner Bros. Discovery this week, securing the media company for $111 billion after Netflix withdrew from the bidding competition.
The deal concluded a six-month bidding war involving major media players. Netflix co-CEO Ted Sarandos announced the company's decision to step back after Paramount raised its offer to $31 per share, surpassing Netflix's previous bid of $27.75 per share. Sarandos said in an interview with Bloomberg that Netflix determined immediately upon learning of Paramount's higher offer that the company would not match it.
"I'm happy with what we got and happy with what we left behind," Sarandos said. "We knew right away when we got the news on Thursday that they had a superior offer and the details of that deal. We knew exactly what we were going to do."
Paramount's acquisition will combine the studio behind films including "Superman," "A Minecraft Movie" and "Sinners" with Warner Bros. Discovery's operations. The combined entity would control two streaming services: Paramount+ and HBO Max.
David Ellison, Paramount's chief executive, will oversee the acquisition. Ellison and his father, billionaire Larry Ellison, have allied themselves with President Trump. Democratic critics of the deal in Congress have limited power to block its approval, according to officials familiar with the political landscape.
However, the transaction faces additional regulatory hurdles. State attorneys general have pledged to scrutinize the deal closely. European regulators will most likely need to grant approval as well before the transaction can close.
Sarandos characterized Paramount's offer as unusual. "The offer of $110 billion from Paramount to acquire Warner Bros. Discovery is uncommon and irrational," he said, adding that he remained confident in Netflix's future and that the company would not be negatively affected by the acquisition.
Netflix's stock price rose more than 10 percent following the announcement that the company would not pursue the deal further. The market reaction reflected investor confidence in Netflix's decision to withdraw from the competition.
The acquisition encompasses Warner Bros.' film studio, HBO Max streaming service, and CNN, the news network. The combined company structure will consolidate significant entertainment and media assets under Ellison's control.