Paramount set for $111bn Warner Bros takeover after Netflix drops bid

Paramount Set to Acquire Warner Bros for $111bn After Netflix Withdraws Bid

Netflix has withdrawn its bid to purchase Warner Bros Discovery, paving the way for Paramount Skydance to secure a contentious months-long takeover of one of Hollywood’s most iconic studios. The $111bn deal, which would give Paramount control of Warner Bros’ films, media networks, and assets, has been deemed “superior” by the studio’s board, according to a statement released Thursday. This decision follows Netflix’s refusal to increase its offer, citing a lack of financial appeal at the current valuation.

Warner Bros, which had been on the market since last year, initially accepted a $82bn proposal from Netflix in December. However, Paramount launched a rival bid, prompting Warner Bros to reject the earlier offer. The latest bid from Paramount includes an additional $1 per share, which has been accepted by the board as the more favorable option. Netflix co-chief executives Ted Sarandos and Greg Peters emphasized their disciplined approach, stating the deal was “a nice to have” at the right price but not a “must have” at any cost.

“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Sarandos and Peters said. “However, we’ve always been disciplined.” “This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price,” they added.

The announcement came shortly after Sarandos visited the White House, marking a pivotal moment in the ongoing battle for Warner Bros. If regulators approve the merger, it could dramatically alter Hollywood’s landscape. California Attorney General Rob Bonta, however, noted the deal “is not a done deal,” highlighting ongoing investigations and the potential for regulatory challenges. “These two Hollywood titans have not cleared regulatory scrutiny,” Bonta wrote, “the California Department of Justice has an open investigation, and we intend to be vigorous in our review.”

Paramount’s acquisition of Warner Bros would also impact CNN, the network’s parent company. The deal has drawn attention due to Larry Ellison, the tech billionaire and Paramount’s backer, and his son David, who leads the company. Ellison’s close ties to former President Donald Trump, a major Republican donor, have raised concerns about the merger’s political implications. Trump had previously advocated for CNN’s sale, calling its leadership “corrupt or incompetent” and suggesting it should be part of any Warner Bros transaction.

Jared Kushner, Trump’s son-in-law and adviser, supported Paramount’s initial bid through his investment firm, Affinity Partners. However, his firm stepped back in December amid scrutiny. The merger has also faced challenges with the Federal Communications Commission, which had to approve the deal. Among the concessions, Paramount agreed to a $16m settlement for CBS News, following Trump’s lawsuit over a “60 Minutes” interview with Kamala Harris.

With the deal now favored by Warner Bros, Paramount aims to consolidate its position as a leading entertainment force. The company’s new proposal offers shareholders “superior value, certainty, and speed to closing,” according to David Ellison. If approved, the merger would integrate HBO Max subscribers into Paramount’s portfolio, while also granting control of CNN, Food Network, and various sports properties. The full implications of this shift remain under review as regulatory hurdles persist.