Netflix drops out of Warner Bros Discovery acquisition after Paramount bid declared "superior"

Netflix has stepped away from its planned takeover of Warner Bros Discovery, clearing the path for rival bidder Paramount Skydance to win a months-long battle for the major studio.

The world’s largest streaming platform refused to raise its previous offer after Warner Bros Discovery, which put itself up for sale last year, determined a rival bid from Paramount Skydance to be “superior”.

On Thursday (26 February), Netflix executives Ted Sarandos and Greg Peters said they had declined to match Paramount’s bid as “the deal is no longer financially attractive” at that price.

Paramount’s revised offer for the company stands at $31 per share, up from $30, which valued WBD at $111bn (£82.4bn) including debt.

Netflix, which previously agreed an $81 billion deal for Warner Bros in December, responded by removing itself from the bidding process.

“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. However, we’ve always been disciplined," Sarandos and Peters said in their statement.

They went on to thank David Zaslav, Gunnar Wiedenfels, Bruce Campbell, Brad Singer and the Warner Bros Discovery board “for running a fair and rigorous process”.

The pair added: “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.

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

They added: “Netflix’s business is healthy, strong and growing organically,” which the pair say is “powered by our slate and best-in-class streaming service".

They also said: “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.”

The statement concluded: “We will continue to do what we’ve done for more than 20 years as a public company: delight our members, profitably grow our business, and drive long-term shareholder value.”

Now that Netflix has stepped aside, it puts Paramount in pole position for winning the fight for the global media company that owns franchises such as Harry Potter and Game of Thrones.

Before a Paramount deal is guaranteed, however, it will still need formal regulatory approval.

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