Paramount takes the lead in the Warner Bros. race, but regulatory hurdles and political ties leave the deal far from guaranteed.
In a twist worthy of a Hollywood plot, Netflix has walked away from a Warner Bros. Discovery (WBD) merger and left Paramount as the lone rival bidder.
Netflix made the announcement on 26 February, with Co-Chief Executive Officers Ted Sarandos and Greg Peters saying matching Paramount’s improved offer would no longer be “financially attractive.”
The streaming giant described the Warner Bros. transaction as a “nice-to-have” rather than a “must-have,” emphasising the deal would have created shareholder value and preserved US production jobs but was not compelling at the price required.
The streaming giant’s decision to walk away follows weeks of Netflix being the clear frontrunner to acquire WBD. The company had been seen as the preferred partner due to a straightforward mix of cash and stock, and a deal structure viewed as more likely to pass regulatory scrutiny.
Paramount, meanwhile, was given just seven days to demonstrate its revised all-cash offer could deliver superior value to WBD shareholders, a short window in which it increased its bid to $31 per share from its initial $30 offer.
WBD’s board maintained Netflix’s merger remained the recommended path, however, this all changed following Paramount’s most recent proposal.
Under the terms of the merger agreement, WBD gave Netflix four business days to revise its offer, but the streaming giant determined matching Paramount’s improved bid was no longer financially attractive.
“Warner Bros. is a world-class organisation, and we want to thank David Zaslav, Gunnar Wiedenfels, Bruce Campbell, Brad Singer and the WBD Board for running a fair and rigorous process,” Netflix said in its statement.
“We believe we would have been strong stewards of Warner Bros.’ iconic brands, and our deal would have strengthened the entertainment industry.”
How good is Paramount’s new bid?
Netflix’s proposal valued WBD at roughly $27.75 per share and focused on acquiring the company’s studio and streaming operations.
Netflix highlighted its deal had a straightforward regulatory path and included protections in case it was outbid, such as the $2.8bn breakup fee WBD. would owe Netflix if it accepted a superior proposal.
Paramount’s late entry, however, changed the picture, with the company submitting a revised offer of $31 per share in cash. Paramount also agreed to cover the $2.8bn termination fee, as well as a $7bn payout if the deal fails due to regulatory hurdles.
Unlike Netflix, Paramount is offering to acquire the entire company, providing on paper a simpler transaction for shareholders.
“Paramount welcomes the WBD Board’s determination and looks forward to continuing to engage constructively with WBD to deliver the benefits of Paramount’s proposal to WBD shareholders, the creative community and consumers,” read a statement by Paramount.
Despite Paramount celebrating this series of events as victory, the deal is not guaranteed to close because it must clear multiple layers of regulatory scrutiny in both the US and Europe.
A shadow still hangs
Regulators will be looking at whether a combined Paramount–WBD would reduce competition, limit consumer choice, or create excessive market power across streaming, film, television and advertising
The US looks more likely to approve partly because Paramount’s bid is linked to figures close to the Trump administration. Paramount Skydance is led by David Ellison, described by TIME as “an ally of the Trump White House,” and Jared Kushner, President Donald Trump’s son‑in‑law and former senior White House adviser, has publicly backed the offer.
European approval is less certain because the merger could significantly shrink the number of major studios operating globally, which could be a direct threat to Europe’s film ecosystem by reducing the number of buyers for productions.
How the saga unfolded
Oct 2025: WBD announces it is considering strategic alternatives for the company, prompting interest from multiple buyers including Netflix, Paramount Skydance and Comcast.
Nov 2025: In a competitive process, binding second-round offers are submitted by Netflix, Paramount Skydance and Comcast; Netflix’s offer for WBD’s studio and streaming assets begins to outpace rivals.
4–5 Dec 2025: Netflix and WBD announce an agreement for Netflix to acquire Warner Bros.’ studio and streaming business (including HBO/HBO Max, DC and content libraries), excluding the legacy cable/network businesses spun out as Discovery Global. The transaction values equity at roughly $72 billion and enterprise value at $82.7 billion, with WBD shareholders to vote later.
8 Dec 2025: Paramount Skydance launches a hostile all-cash tender offer for the entire WBD company (not just studios/streaming), initially $108.4 billion ($30 per share). Paramount claims this higher all-cash bid will better clear regulatory hurdles and enhance shareholder value.WBD’s board publicly endorses Netflix’s bid and rejects Paramount’s initial overtures.
Late Dec 2025: Paramount makes multiple renewed hostile offers (six in ~12 weeks) trying to derail the Netflix transaction. These are repeatedly rebuffed by WBD leadership. Netflix is broadly seen in the media as the frontrunner following exclusive negotiations.
12 Jan 2026: Paramount Skydance sues WBD for more deal information and signals intentions to nominate directors to WBD’s board to shift control.
20 Jan 20 2026: Netflix reshapes its offer into an all-cash bid at $27.75 per share, which wins unanimous support from WBD’s board for certainty and earlier shareholder voting.
Early Feb 2026: Paramount amends its hostile bid, adding a ticking fee (~25 cents per share per quarter past year-end) and agreeing to cover breakup costs, making its approach more competitive.
5 Feb 2026: David Ellison (Paramount Skydance CEO) writes publicly to the industry highlighting his bid’s competitive rationale versus Netflix’s, deepening the contest.
10 Feb 2026: Paramount offers additional enhancements — including backstopping WBD’s debt exchange costs and matching financial terms more closely to Netflix’s proposal.
Mid-Feb 2026: WBD grants Paramount a seven-day window to make its “best and final offer” under a waiver obtained from Netflix.
19 Feb 2026: The statutory US antitrust waiting period for Paramount’s bid expires, clearing a key regulatory procedural hurdle (though not final approval).
25 Feb 2026: Paramount sweetens its bid again — reportedly to $31 per share ($110–111 billion enterprise value) and WBD’s board determines it to be a “potentially superior proposal” to the Netflix agreement.
26 Feb 2026: With Paramount’s revised proposal formally deemed superior, Netflix is given a four-business-day window to match it. Netflix declines to increase its offer, calling the required price financially unviable, and withdraws from the bid, exiting the contest.
