Netflix has officially ended its pursuit of Warner Bros. Discovery after declining to match a higher offer from Paramount Skydance.
The decision follows Paramount Skydance’s revised $110 billion proposal to acquire all of Warner Bros. Discovery’s assets. Under the terms of the new bid, Paramount would also pay Netflix a $2.8 billion breakup fee.
Warner Bros. Discovery’s board is expected to vote on adopting the Paramount merger agreement on March 20.
In a joint statement, Netflix co-CEOs Ted Sarandos and Greg Peters said the company remained disciplined in its approach.
“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” they said. “However, at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive.”
The executives said the acquisition was optional, not essential, and that Netflix will focus on organic growth, planning to spend about $20 billion on original content this year.
Warner Bros. Discovery President and CEO David Zaslav thanked Netflix for its partnership during the process and expressed enthusiasm about combining with Paramount Skydance.
Board Chair Samuel A. Di Piazza, Jr. said the five-and-a-half-month review process positioned the companies for long-term value creation.
Netflix had initially agreed in December to acquire HBO and HBO Max, along with Warner Bros. Discovery’s television and film studios, while spinning off cable networks and other assets. Paramount’s proposal, by contrast, covers the entire company.
The bidding war heated up recently, with Sarandos promoting Netflix’s strategy, but the company ultimately decided not to increase its offer.
