Netflix, the world's largest streaming platform, announced on 26/2 its withdrawal from the bidding process to acquire Warner Bros Discovery (WBD). The company stated its decision was based on financial discipline, as matching Paramount Skydance's latest offer would render the deal unattractive. This move positions Paramount Skydance as the likely victor in the ongoing battle to take over the Hollywood media conglomerate.
"We always maintain discipline. If we were to match Paramount Skydance's latest offer, the deal would no longer be financially attractive. Therefore, we decline to raise our bid," Netflix stated on 26/2. According to Reuters, the Warner Bros board of directors (BOD) still needs to terminate its agreement with Netflix and approve Paramount Skydance's offer.
Paramount's latest proposal stands at 31 USD per share, significantly exceeding Netflix's 27,75 USD offer. Paramount aims to acquire all of WBD, whereas Netflix had previously agreed to purchase WBD's television, film studio, and streaming division for 82,7 billion USD. Warner CEO David Zaslav expressed enthusiasm for the potential merger: "Once the board of directors votes to approve the merger agreement with Paramount, the deal will create significant value for shareholders. We are excited about the potential of the combined company between Paramount Skydance and Warner Bros Discovery."
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Netflix will withdraw from the deal to acquire a portion of Warner Bros. Discovery. *Photo: Deadline*
Paramount has aggressively pursued a deal with the Hollywood giant over the past few months. Netflix Co-CEO Ted Sarandos underscored their disciplined approach in a 20/2 interview with Fox News, stating they are "very disciplined buyers." Following the company's refusal to raise its bid, Netflix shares rose more than 10% in after-hours trading.
WBD is a leading US media and entertainment conglomerate. It owns the Warner Bros. studio, HBO, HBO Max, Discovery Channel, CNN, and various other cable television channels. The company was formed in 2022 after the merger of WarnerMedia and Discovery.
A potential deal between Paramount and Warner Bros would combine two major Hollywood studios, streaming platforms (HBO Max and Paramount+), and news services (CNN and CBS). However, this transaction faces scrutiny under antitrust regulations in various US states and other countries.
Analysts at TD Cowen believe that federal approval "seems feasible in the current political climate." Yet, they assess that some state-level regulatory agencies, particularly in California, might challenge the deal. European authorities could also take similar action.
Ha Thu (according to Reuters)
