Netflix Inc. has formally withdrawn from the acquisition battle for Warner Bros. Discovery (WBD), stating it will not raise its bid to match a superior offer from Paramount Global. The decision, announced on Thursday, follows Paramount's increased hostile bid of $31 per share for the entire WBD portfolio, which includes cable networks like CNN and HGTV.
In a joint statement, Netflix co-CEOs Ted Sarandos and Greg Peters said, "The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. 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 announcement triggered a more than 9% surge in Netflix's stock price in after-hours trading.
Months of Pursuit Culminate in Withdrawal
The move ends Netflix's attempt to acquire the owner of HBO and iconic intellectual property like DC Comics' Batman. Paramount's CEO, David Ellison, has pursued WBD relentlessly for months, making a total of 10 official offers even after the initial Netflix-Warner Bros. deal was announced. The competition has framed a stark contrast between the two potential buyers' strategies and regulatory arguments.
Paramount has positioned itself as a more suitable owner than the streaming behemoth, arguing that a Netflix acquisition would grant it unhealthy dominance over competitors and consumers. Netflix has countered that it faces significant competition from platforms like YouTube and free streaming services, and that it would be a better steward for Warner Bros., promising fewer layoffs and more television production jobs.
Regulatory and Political Dimensions
Both companies have actively sought support from US regulators and President Donald Trump. While President Trump remarked in December that Netflix's market position "could be a problem" if it bought Warner Bros., he stated in February he would recuse himself, leaving the decision to the US Department of Justice. A White House spokesperson later affirmed the president's neutrality, stating he has "great relationships with all parties" and "no preference."
However, Netflix drew Trump's ire days later when he demanded the removal of board member Susan Rice, a former Obama and Biden administration official, or face "consequences." Co-CEO Ted Sarandos downplayed the comments, asserting the potential deal was "not a political one." Sarandos was reported to have attended meetings at the White House on the day of the withdrawal announcement, though it is unclear if he met with the president.
The path forward now sees Paramount's $31-per-share offer as the sole remaining bid for Warner Bros. Discovery. The focus shifts to whether regulators will approve a merger that would significantly consolidate traditional media assets under Paramount's control, following the collapse of a deal that would have created a streaming and content powerhouse with Netflix.