Netflix Withdraws Its Offer for Warner Bros. Following Paramount's $111 Billion Bid

Netflix has chosen to terminate its bid for Warner Bros. Discovery following a superior proposal from Paramount Skydance. The announcement was made on Thursday, where Netflix confirmed it would walk away from the acquisition while securing a breakup fee of $2.8 billion as a result of cancelling its agreement with Warner Bros. Discovery.

This decision arose after Warner Bros. Discovery's board assessed that Paramount Skydance's latest offer of $111 billion exceeded Netflix's previous bid of $82.7 billion.

In a joint statement, Netflix co-CEOs Ted Sarandos and Greg Peters indicated that the financial terms needed to match Paramount Skydance's proposal made the deal unattractive. They expressed, "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 bidding war for Warner Bros. Discovery has unfolded over the past months, particularly after the company's plans to restructure its operations became public.

In June 2025, Disney Zaslav, the President and CEO of Warner Bros. Discovery, revealed intentions to split the company, dividing its streaming and studio divisions from other media brands such as its television and sports channels.

This restructuring aimed to establish Discovery Global as a new entity, encompassing assets from CNN, TNT Sports, and European free-to-air channels, along with digital platforms like Discovery+ and Bleacher Report.

Paramount Skydance initially made an unsolicited offer nearing $60 billion, equating to $24 per share for Warner Bros. Discovery, which was rejected by the board at that time.

The rejection initiated a more extensive bidding contest involving companies such as Netflix and Comcast.

On December 5, 2025, Netflix and Warner Bros. Discovery announced the finalization of a cash-and-stock agreement valued at $27.75 per share, leading to an enterprise valuation of approximately $82.7 billion for Warner Bros. Discovery.

The agreement was projected to conclude following the anticipated third quarter spin-off of Discovery Global in 2026.

However, merely three days post-announcement, Paramount Skydance facilitated a hostile all-cash offer of $30 per share, bringing the company's valuation to $108.4 billion, which further intensified the competition.

In January, Paramount escalated the conflict by filing a lawsuit against Warner Bros. Discovery, claiming its cash offer was superior to Netflix's previous proposal.

Earlier this week, Paramount raised its bid to $31 per share, leading Warner Bros. Discovery to acknowledge that this offer "could reasonably be expected to lead to a 'company superior proposal.'"

As a result of this evaluation, Netflix opted not to increase its own bid. Sarandos and Peters stated, "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."

They also noted that Netflix intends to continue significant investments in its core operations, with approximately $20 billion budgeted for films and television content this year as the company seeks to broaden its entertainment portfolio.

Paramount Skydance announced that its proposal incorporates covering the fee due to Netflix for terminating their agreement.

Investor reactions were positive in light of these developments, with Netflix shares rising by over 8% in after-hours trading, while Paramount’s stock increased by 6%. However, Warner Bros. Discovery shares saw a slight decline of 1.7%.