Paramount poised to acquire Warner Bros. after Netflix walks away

Netflix said it was "declining to match" Paramount's latest offer after the Warner Bros. board declared it a "Superior Proposal" under the terms of its existing merger agreement with Netflix.

"The transaction we negotiated would have created shareholder value with a clear path to regulatory approval," Netflix said in a statement.

"However, we've always been disciplined, and at the price required to match Paramount Skydance's latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid," it added.

The company insisted it "would have been strong stewards of Warner Bros.' iconic brands, and that our deal would have strengthened the entertainment industry and preserved and created more production jobs in the US.

"But this transaction was always a 'nice to have' at the right price, not a 'must have' at any price," it concluded.

Without a Netflix counteroffer, the Warner Bros. Discovery board is now free to terminate its agreement with the streaming giant and proceed with Paramount.

Warner Bros. shareholders were previously scheduled to vote on the Netflix agreement on March 20. That vote is now essentially moot, and attention shifts to securing shareholder approval for the Paramount deal instead.

- White House attention -

Paramount's sweetened offer, made Monday, was the latest installment of a bidding war that drew White House attention, with President Donald Trump insisting he had a say in the outcome.

Crucially, the proposal included a commitment from Oracle founder Larry Ellison to contribute additional funding if needed to support solvency requirements from Paramount's lending banks.

Ellison is the father of Paramount CEO David Ellison, a Hollywood producer, and largely financed his son's takeover of Paramount and his subsequent bid for Warner Bros. Discovery.

Larry Ellison is also a longtime ally of Trump, and both Paramount and Netflix sought to curry favor with the White House.

Creating headwinds for Netflix, Republican lawmakers came out against the company during the deal process, accusing it of promoting pro-trans content on its platform, something co-CEO Ted Sarandos strenuously denied.

Just hours before withdrawing from the bidding war, Sarandos was filmed entering the White House on Thursday for talks with officials — though not the president, according to CNBC.

The Paramount offer also includes financing from the sovereign wealth funds of three Middle Eastern countries — Saudi Arabia, Qatar and Abu Dhabi — which could attract an additional layer of regulatory scrutiny.

The revised Paramount offer included a purchase price of $31.00 per share in cash, a one-dollar increase from its earlier bid, which valued the company at around $108 billion.

Paramount has also offered a $7 billion regulatory termination fee should the deal fail to close on regulatory grounds, and agreed to cover the $2.8 billion breakup fee Warner Bros. Discovery would owe Netflix if it walked away from their agreement.

A combined Paramount-Warner Bros. would bring together streaming services HBO Max and Paramount+, and merge two of Hollywood's largest movie studios. It would also place CNN and CBS News under one ownership structure.

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