Netflix has walked away from its high-stakes bid to buy Warner Bros Discovery, paving the way for Paramount Skydance to swoop in with a superior $31-per-share offer that values the Hollywood giant at over $108 billion.
The streaming titan’s decision to stay disciplined rather than chase a pricier deal sent its shares soaring more than 10% in after-hours trading on Thursday, delighting investors who feared the acquisition would stretch Netflix’s balance sheet too thin.
Warner Bros bidding war: A timeline
The saga began in late 2025 when Netflix announced plans to acquire Warner Bros’ studio and streaming assets (then, HBO Max) in a cash-and-stock deal valued at $27.75 per share, or $72 billion equity/$82.7 billion enterprise value, after Warner Bros Discovery (WBD) spun off its Discovery Global unit.
Paramount Skydance countered with a hostile $30-per-share all-cash bid for the entire WBD, claiming it was superior and more likely to clear antitrust hurdles.
WBD’s board initially stuck with Netflix, calling Paramount’s offer “inferior” and praising Netflix’s “persuasive” proposal with regulatory clarity and a high breakup fee.
Last week, Paramount upped its bid to $31 per share, prompting WBD to deem it a “superior proposal” under the Netflix merger terms. Netflix got four business days to match but declined on Thursday, citing that Paramount Skydance’s price made the deal “no longer financially attractive.”
Paramount sweetened the pot by raising its breakup fee to $7 billion (from $5.8 billion) if regulators block the deal and agreeing to pay WBD’s $2.8 billion termination fee to Netflix.
Billionaire Larry Ellison—Oracle co-founder and Paramount CEO David Ellison’s father—committed $45.7 billion in equity, backed by Bank of America, Citi and Apollo’s $57.5 billion debt package.
WBD CEO David Zaslav hailed the outcome as “tremendous value for shareholders” and expressed excitement about the combined entity’s storytelling potential. Activist investor Ancora Holdings, a small WBD stakeholder, called it a “win-win” for shareholders and the industry, in an official statement.
Stock reaction and hurdles ahead
Netflix shares jumped over 10 per cent post-announcement, reflecting relief that the company will now focus on organic growth, including $20 billion in content investment this year and resuming buybacks.
WBD and Paramount stocks also rose initially, though regulatory scrutiny looms large.
The Paramount–WBD merger, uniting studios, HBO Max/Paramount+ and CNN/CBS, faces antitrust reviews from the US DOJ, FTC, California AG—who vowed a “vigorous” probe—and possibly, Europe. Democratic senators like Elizabeth Warren worry about political favouritism given Ellison’s Trump ties, while analysts see federal approval as likely but state challenges possible.