Netflix cedes Warner Bros. Discovery to Paramount: “No longer financially attractive”

In a surprising turn of events, Netflix has decided to withdraw from its planned acquisition of Warner Bros. Discovery (WBD), which includes its streaming and film studio operations. This decision came just a day after Netflix increased its bid for WBD by $1 per share. Now, Paramount Skydance is set to step in as the new owner of WBD, claiming a treasure trove of intellectual properties such as Game of Thrones, DC Comics, and the HBO Max streaming platform, alongside cable networks like CNN and TBS. The potential merger between Netflix and WBD was first announced on December 5, with Netflix proposing to pay an equity value of $72 billion, translating to an estimated total enterprise value of $82.7 billion for the acquisition. At that time, reports indicated that WBD had a market value of around $60 billion. Paramount has had its sights set on WBD for several years and responded to the December merger announcement with a bold hostile takeover bid. In a strategic move, Paramount not only raised its offer to acquire all of WBD but also committed to a hefty $7 billion regulatory termination fee if the merger fails to receive antitrust clearance. Furthermore, the company agreed to pay $0.25 per share for each day the deal remains unclosed, starting from September 30. Additionally, Paramount is prepared to cover WBD’s $2.8 million termination fee stemming from Netflix's cancellation of their merger agreement.