For months, Netflix had been considered the favourite to close its deal to acquire Warner Bros Discovery, one of the biggest entities in Hollywood. Ever since the streaming giant had disclosed its $72-billion bid for the studio and its titles, the industry had been bracing for the takeover. But on Thursday, Netflix abruptly walked away from the deal after rivals Paramount Skydance raised their offer. This stunning move effectively puts Paramount in a position to take over its storied Hollywood rival.
Netflix drops out of race for Warner Bros
Warner Bros board announced on Thursday that Skydance-owned Paramount’s latest offer to buy the entire company for $31 per share was superior to the agreement it had previously struck with Netflix. Almost immediately after that, Netflix announced it would not raise its proposal. It said the new price it would have to pay to acquire Warner would make the deal “no longer financially attractive.”
In a joint statement, Netflix’s co-CEOs Ted Sarandos and Greg Peters said, “We believe we would have been strong stewards of Warner Bros.′ iconic brands. But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”
Netflix’s decision to walk away on Thursday marks the latest development in a monthslong, messy corporate battle over Warner’s future. Sarandos and Peters thanked Warner’s leadership despite the final outcome.
Paramount emerges winner
Warner Bros had backed Netflix’s original $83-billion offer since December, right up until Thursday evening. But on Thursday, rival Paramount sweetened its bid to buy all of Warner for $31 per share, valuing the deal at about $111 billion, including debt, alongside other revisions. This effectively meant that Paramount was willing to acquire all of Warner Bros, while Netflix had been eyeing Warner’s studio and streaming business. The streaming giant was given 4 business days to submit a counteroffer. Netflix’s original bid was at $27.75 per share offer on the table for Warner’s studio and streaming business, totalling nearly $83 billion including debt.
Given that Paramount wants the entire company, it means HBO Max, cult-favourite titles like Harry Potter, and even CNN could soon find themselves under the same roof as Paramount’s CBS, Top Gun, and the Paramount streaming service.
The combination will still need the green light from both Warner shareholders and regulators, raising antitrust concerns and questions about political influence.
In a statement Thursday night, Warner Bros CEO David Zaslav said Netflix executives had been “extraordinary partners” and that he wished them “well in the future.” Warner’s board hasn’t officially adopted Paramount’s merger agreement yet, but once it does, Zaslav said it “will create tremendous value.”
(With AP inputs)
