Paramount Skydance secures Warner Bros. Discovery acquisition as Netflix withdraws, creating a transformational merger in Hollywood

Paramount Skydance has won the bid to acquire Warner Bros. Discovery after Netflix confirmed it would not increase its offer for the Hollywood studio and streaming assets.

Also read: Paramount turns up heat in hostile Warner bid

Netflix stated that matching Paramount Skydance’s revised proposal was no longer financially attractive, announcing its withdrawal from the bidding process.

Warner Bros. Discovery’s board is expected to formally terminate its merger agreement with Netflix and adopt Paramount Skydance’s improved $31-per-share offer, surpassing Netflix’s $27.75 bid.

Chief Executive David Zaslav welcomed the development, describing the merger as a “value-creating opportunity” for shareholders and highlighting prospects to expand storytelling capabilities and global reach.

Paramount intensified its pursuit in recent weeks, including a targeted campaign to outbid Netflix.

The company enhanced the financial terms, raising the termination fee to $7 billion if regulatory approval fails and agreeing to cover the $2.8 billion breakup fee Warner Bros. Discovery owes Netflix.

The Ellison Trust, backed by billionaire Larry Ellison, is committing $45.7 billion in equity, with debt financing of $57.5 billion provided by Bank of America Merrill Lynch, Citigroup, and Apollo Global Management.

Investors reacted positively to Netflix’s exit, with shares rising more than 10 per cent. A source close to Netflix’s advisory team said further bidding was economically unjustifiable, particularly given that Paramount’s backers were prepared to pay a premium considered excessive.

Activist investor Ancora Holdings Group endorsed the revised offer, calling it a “win for shareholders and the broader industry.”

Regulatory scrutiny remains a critical hurdle.

The merger would combine major studios and streaming platforms including HBO Max and Paramount alongside news operations CNN and CBS.

California’s Department of Justice has an open investigation, while Democratic Senators Elizabeth Warren, Bernie Sanders, and Richard Blumenthal raised concerns over potential political influence on regulatory approval.

European regulators are also expected to examine the deal given the global reach of the combined entity.

If completed, the merger would transform the entertainment landscape by consolidating premium film studios, extensive streaming libraries, and influential news brands under one corporate umbrella.

Also read: Netflix pulls out of Warner Bros deal in setback

For Paramount Skydance, the deal represents a bold expansion, while Warner Bros. Discovery shareholders gain immediate value, pending regulatory clearance in the months ahead.