Netflix has withdrawn its acquisition offer for Warner Bros. Discovery, clearing the path for Paramount Skydance’s takeover bid.
Netflix Withdraws Offer
The negotiated transaction would have been profitable for shareholders and ensured a clear path to regulatory approval, said Netflix co-CEOs Ted Sarandos and Greg Peters in a statement. However, maintaining discipline and facing the price required to match the latest Paramount Skydance offer, the deal is no longer financially attractive for Netflix, they added.
Paramount Positioned to Acquire Warner Bros. Discovery
Netflix’s decision means Paramount Skydance has an open path to acquire Warner Bros. Discovery (WBD), including the company’s television channels such as Polish TVN and CNN. On Thursday, WBD’s board announced it had accepted Paramount’s new offer as superior to Netflix’s.
Paramount’s Offer Details
According to Paramount CEO David Ellison, the decision was made unanimously. “We are pleased that the WBD Board has unanimously confirmed that our offer is extremely price-competitive, resulting in greater value for WBD shareholders, certainty and speed of transaction completion,” he announced.
Under the terms of the agreement with Netflix regarding the acquisition of the company, Paramount’s rival now had four days to improve its offer. Paramount offered to purchase the entire company for $31 per share (up $1 from the previous offer), plus an additional 25 cents per quarter of delay in finalizing the transaction from October of this year. Additionally, the company promised to pay $2.8 billion to terminate its agreement with Netflix and $7 billion in compensation if the transaction is blocked by regulators.
Political Context and Trump’s Influence
Paramount’s offer concerns the acquisition of the entire company and, according to media reports, was favored by the Donald Trump administration. Trump himself said that any potential transaction should lead to a change in CNN’s ownership, which he accuses of bias. On Wednesday, Republican attorneys general from 11 states also spoke out against WBD’s acquisition by Netflix, filing with the Department of Justice to block the transaction due to concerns about the monopolization of the streaming sector.
The head of Paramount Skydance is David Ellison, son of Trump-supporting billionaire Larry Ellison. Since Trump took power, Ellison’s companies have taken control of Paramount, along with CBS, and are also part of a consortium that acquired control of American TikTok. In both cases, owners were accused of interfering with content in favor of the administration.
White House Pressure on Netflix
Meanwhile, Netflix CEO Ted Sarandos was reportedly scheduled to visit the White House on Thursday to discuss the transaction. Last week, Trump demanded that the company fire former Obama advisor Susan Rice from its Board of Directors. The reason was Rice’s statement criticizing corporations that “bent the knee” under White House pressure.
