Netflix drops $83 billion bid for Warner Bros. Discovery, paving way for Paramount Skydance deal

Netflix said on Thursday that it will not match Paramount Skydance’s latest bid for Warner Bros. Discovery, clearing the way for a massive merger that could shake up the entertainment and media industry. 

Netflix agreed in December to buy part of Warner Bros. Discovery for $27.75 a share, or $82.7 billion. But Paramount Skydance had made a $30 a share all-cash offer to buy all of the company, and on Tuesday raised its offer for Warner Bros. Discovery to $31 a share (Paramount Skydance owns CBS News.)

Earlier on Thursday, Warner Bros. Discovery’s board of directors notified Netflix that Paramount’s $31 per share offer constituted a “superior proposal” for the company.

“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Netflix co-CEOs Ted Sarandos and Greg Peters said in a statement Thursday. “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.”

Paramount Skydance didn’t immediately respond to a request for comment. 

Warner Bros. Discovery owns streaming and film studios, along with cable channels including CNN, Food Network, HBO, HGTV, TBS, TNT and Turner Classic Movies.

The merger of Paramount Skydance and Warner Bros. Discovery will require approval from federal antitrust enforcers. Paramount Skydance executives have said that combining the companies would benefit consumers and help boost the entertainment industry, which has struggled to recover from the pandemic. 

Some entertainment industry groups and lawmakers have raised concerns that uniting two major Hollywood studios could undermine competition. For its part, Paramount Skydance executives had argued that a union of Netflix and Warner Bros. Discovery, which owns streaming platform HBO Max, was likely to arouse antitrust objections.

In enhancing its offer this week, Paramount Skydance said it would pay a $7 billion termination fee if its acquisition of Warner Bros. Discovery collapsed over regulatory concerns.