TLDRs;
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Paramount secures Warner Bros Discovery with a 111 billion dollar bid surpassing Netflix’s offer
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Paramount acquires all Warner Bros Discovery assets including HBO CNN and WBD studios
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Netflix stock jumps 10 percent after backing out signaling investor approval for financial discipline
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Paramount’s 111 billion acquisition financed by debt and Larry Ellison equity support
Netflix shares soared in after-hours trading Thursday, climbing as much as 10%, after the streaming giant decided not to raise its $82.7 billion all-cash bid for Warner Bros. Discovery (WBD).
The move comes after a heated bidding war concluded in favor of Paramount, owned by David Ellison and financially supported by his father, Oracle executive chair Larry Ellison.
Paramount Outbids Netflix for WBD
Paramount Skydance’s latest proposal, valued at $31 per share, was deemed a “superior offer” by Warner Bros. Discovery, surpassing Netflix’s initial proposal for the studio’s streaming and entertainment assets. Netflix, after careful evaluation, declined to counter the bid, citing financial prudence and discipline in a statement from co-CEOs Ted Sarandos and Greg Peters.
“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. However, at the price required to match Paramount’s latest offer, the deal is no longer financially attractive,” Netflix executives said.
The agreement means WBD will pay Netflix a $2.8 billion termination fee to end the original deal, which Paramount has agreed to cover as part of its acquisition.
Full WBD Portfolio Goes to Paramount
Under the terms of the new deal, Paramount will acquire the entirety of Warner Bros. Discovery, including HBO, WBD’s streaming service, game studios, and linear television networks like CNN, TBS, TNT, Discovery, and HGTV. The acquisition also covers WBD’s entertainment divisions, giving Paramount a major foothold in content production, news, and streaming services.
This marks a rapid expansion for Paramount, which was acquired last year by Skydance Media and backed with significant equity from Larry Ellison. The deal consolidates Paramount’s position as a major media powerhouse and expands its reach into both streaming and traditional cable networks.
Market Reacts to Netflix Exit
Netflix shares surged following the announcement, climbing 10% in after-hours trading in New York. Paramount stock also gained, rising 4.5% on investor optimism about the company’s expanded content portfolio. Analysts noted that Netflix’s decision to walk away reinforces its reputation for financial discipline, even in the midst of a high-profile media acquisition battle.
The market interpreted the move as Netflix prioritizing shareholder value over an overextended acquisition, maintaining its liquidity and avoiding additional debt burdens that could have accompanied a larger bid.
Deal Financing and Implications
Paramount will take on WBD’s $33 billion debt, supplemented by a $57.5 billion debt commitment from Bank of America Merrill Lynch, Citi, and Apollo Global Management. Larry Ellison has pledged additional equity to cover the acquisition, highlighting the scale and financial backing of the deal.
Despite concerns about job cuts under Ellison’s ownership and potential editorial influence in news operations, the acquisition positions Paramount as a dominant force in media and entertainment. The deal underscores ongoing consolidation in the industry, as major studios vie for control of content, streaming platforms, and networks in an increasingly competitive market.
Netflix’s decision to step back from the Warner Bros. Discovery acquisition demonstrates a strategic focus on financial discipline while Paramount emerges as a major media consolidator backed by deep-pocketed investors. With the deal now closed, the media landscape is set for a dramatic shift, reshaping how streaming, studios, and news networks operate under a single corporate umbrella.
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