Netflix has officially stepped out of the race to acquire Warner Bros. Discovery, ending a high-stakes bidding battle with Paramount Skydance.
In a statement by netflix on Thursday, Feb. 26, the streaming powerhouse confirmed it would not increase its final offer for the Hollywood studio’s prized assets, which include HBO, HBO Max and the Warner Bros. film and television studios in Burbank. The decision comes after Paramount Skydance tabled a significantly higher bid.
“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Netflix CEOs Ted Sarandos and Greg Peters said in a joint statement.
“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,” the statement continued.
Netflix had offered $27.75 per share to acquire HBO, HBO Max and the Burbank-based studio operations. Paramount Skydance, however, raised the stakes with a $31-per-share all-cash proposal covering HBO, the Warner Bros. studios and its cable properties, including CNN and HGTV.
In addition, Paramount put forward Sh5.895 trillion [ $ 45.7 billion] in equity, personally guaranteed by Oracle billionaire co-founder Larry Ellison.
After being granted four days to submit a counteroffer, Netflix ultimately opted not to escalate the bidding. Sarandos and Peters expressed appreciation to Warner Bros. Discovery CEO David Zaslav and his leadership team for overseeing what they described as a fair and thorough sale process.
“We believe we would have been strong stewards of Warner Bros.’ iconic brands, and that our deal would have strengthened the entertainment industry and preserved and created more production jobs in the U.S. But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price,” the statement continues.
Netflix’s original Sh 9.25 trillion [$72 billion] agreement to purchase Warner Bros. Discovery’s TV and film studios along with its streaming division had already stirred political debate and raised antitrust red flags in Washington.
Sen. Mike Lee, who chairs the antitrust subcommittee, warned on Dec. 3 that the proposed acquisition “should send alarm to antitrust enforcers around the world.” Meanwhile, Sen. Elizabeth Warren criticized the deal as “an anti-monopoly nightmare.”
Netflix maintained throughout the process that merging the two companies would expand consumer choice, protect jobs and deliver more programming to its 300 million subscribers at lower cost by eliminating direct competition between HBO Max and Netflix.
“And when they have Warner Brothers… that share goes up a lot,”
According to CNN , President Donald Trump told reporters in Washington D.C. on Dec. 7 “And when they have Warner Brothers… that share goes up a lot,That’s going to be for some economists to tell… But it is a big market share. There’s no question it could be a problem.”
With Netflix stepping aside, Paramount Skydance now moves forward in reshaping the entertainment landscape though the deal’s long-term impact will depend on execution, integration and how regulators respond in an industry already grappling with consolidation concerns.