Netflix pulls out of Warner Bros deal, clearing the way for Paramount Skydance’s superior takeover bid pending regulatory approval
Streaming giant Netflix on Thursday confirmed it had withdrawn from the race to acquire Warner Bros. Discovery, clearing the path for Paramount Skydance to take control of the Hollywood studio.
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The decision ends months of intense bidding over the future of the entertainment powerhouse behind blockbuster films and global television brands.
Netflix executives said the revised financial terms no longer justified continued participation in the takeover battle.
After Paramount Skydance increased its offer by one dollar per share, Netflix declined to match the bid, describing the deal as no longer financially attractive at that level.
Co chief executives Ted Sarandos and Greg Peters said the proposed acquisition had never been considered essential to the company’s long term strategy.
“We have always been disciplined,” the company said, signalling it would not overstretch financially in a high stakes contest.
Industry analysts said the withdrawal reflects Netflix’s strategy of prioritising organic growth and heavy investment in original content rather than pursuing expensive legacy media assets.
With Netflix out of contention, Warner Bros. Discovery’s board described Paramount Skydance’s revised proposal as superior.
If regulators approve the transaction, Paramount Skydance would gain control of major assets including HBO Max, CNN and several sports properties, significantly expanding its streaming and cable footprint.
Paramount already owns brands such as CBS, Nickelodeon and Comedy Central.
Chief executive David Ellison welcomed the board’s backing, saying the offer provides shareholders with superior value, certainty and speed.
However, the deal remains subject to regulatory scrutiny. Rob Bonta, Attorney General of California, said the merger is under active review given the entertainment sector’s importance to the state’s economy.
Approval would also be required from the United States Department of Justice and European regulators.
The proposed takeover has attracted political attention, particularly regarding the future of CNN.
Donald Trump has repeatedly criticised the network’s coverage of his administration and previously suggested it should be sold as part of any Warner Bros transaction.
Concerns have also emerged over Paramount’s financial backing, including ties to technology billionaire Larry Ellison and earlier involvement by Jared Kushner’s investment firm.
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The outcome of the review process will determine whether one of the most consequential media mergers in recent years proceeds.
