Netflix Withdraws from Warner Bros. Deal, Paramount Set to Benefit
In a significant development, Netflix has decided not to increase its bid for Warner Bros., effectively allowing Paramount to emerge as the victor in the acquisition drama. The co-CEOs of Netflix, Ted Sarandos and Greg Peters, communicated their decision on Thursday, indicating that the deal was “no longer financially attractive.”
Netflix Exits Warner Bros. Bidding
The Netflix executives stressed that their initial proposal was only appealing at the right price, emphasizing that it was not a necessary acquisition. They stated, “The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. However, at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive.”
They acknowledged the rigorous process managed by Warner Bros. Discovery, thanking key figures such as David Zaslav and others involved in the decision-making.
Paramount’s Winning Bid
With Netflix withdrawing, Paramount’s offer is poised for acceptance by the Warner Bros. board, which recently deemed it a “superior proposal.” David Zaslav, President and CEO of Warner Bros. Discovery, remarked on the relationship with Netflix, commenting on the collaborative spirit demonstrated throughout the negotiations.
The latest bid from Paramount Skydance includes a share price of $31, alongside additional incentives. Shareholders would receive a $0.25 quarterly fee starting after September 30, 2026, along with a $7 billion termination fee tied to regulatory hurdles. Additionally, Paramount will cover a $2.8 billion termination fee required by Warner Bros. to withdraw from its existing merger agreement with Netflix.
Impact on Netflix and Paramount
As the news broke, Netflix’s stock saw a surge of over 10% in after-hours trading. Sarandos and Peters reaffirmed their commitment to investing in original content, with plans to allocate approximately $20 billion this year towards films and series.
They reiterated their dedication to continuously enhance their streaming offerings, ensuring a profitable growth trajectory for the business while delivering long-term value to shareholders.
- Netflix’s Decline: No increase in bid for Warner Bros.
- Paramount’s Bid: Priced at $31 per share with additional incentives.
- Stock Impact: Netflix shares rose over 10% after news announcement.
- Investment Plans: Netflix commits to $20 billion in content.
This shift in the acquisition landscape solidifies Paramount’s position in entertainment and highlights Netflix’s focused strategy on strengthening its own content pipeline.
