Netflix backs out of Warner Bros deal, declines to match Paramount Skydance’s raised offer

Netflix has withdrawn its offer to acquire Warner Bros Discovery after Paramount Skydance increased its all-cash offer to $31 per share.

Paramount will pay the $2.8 billion termination fee that WBD is required to pay Netflix to terminate its existing merger agreement.

Earlier this month, Paramount amended its $30-per-share offer with “enhancements that surpass the standard needed for the WBD board to engage with Paramount’s superior proposal,” including the termination fee, a ticking fee, and debt financing costs.

WBD’s board of directors determined that Paramount’s latest proposal was “superior” to Netflix. The streaming giant said the price required to match Paramount’s offer was “no longer financially attractive,” so it declined to match.

“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 US,” said Netflix co-CEOs Ted Sarandos and Greg Peters.

“But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.”

They continued: “Netflix’s business is healthy, strong and growing organically, powered by our slate and best-in-class streaming service. This year, we’ll invest approximately $20 billion in quality films and series and will expand our entertainment offering. Consistent with our capital allocation policy, we’ll also resume our share repurchase program.”

WBD announced it was “exploring a potential sale of all or some of its media holdings” in October 2025.

On December 5, Netflix announced its offer to acquire WBD for approximately $82.7 billion, offering $27.75 in cash and $4.50 in Netflix common stock for each share of WBD common stock.

The definitive agreement would have seen Netflix acquire WBD’s film studio, streaming businesses, and games division. It did not include its cable channels. WBD split into two entities in June 2025, separating its Streaming & Studios and Global Networks divisions.

Paramount launched a $108.4 billion hostile takeover bid on December 8, raising the per-share offer to $30 in an all-cash deal. WBD advised shareholders to reject this bid after another review found Paramount’s offer “remained inferior to the Netflix merger,” which it later did.

Paramount then filed a lawsuit against WBD, demanding that the court reveal the terms of Netflix’s bid.