Netflix has withdrawn from its bid to acquire Warner Bros Discovery, clearing the way for Paramount Skydance to proceed with a $111 billion merger that could reshape the global media landscape.
The Warner Bros Discovery (WBD) board on Thursday determined that Paramount Skydance’s revised proposal was superior, prompting Netflix to step aside rather than match the higher offer.
In a statement, Netflix said the transaction it had negotiated would have created shareholder value and offered a clear path to regulatory approval.
However, the streaming giant added that matching Paramount Skydance’s latest bid would not meet its financial discipline thresholds.
“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 bid,” the company said.
Netflix co-CEO Ted Sarandos had been closely involved in negotiations over recent months. In December, Netflix agreed to an $82.7 billion deal, including assumed debt, to acquire WBD. But Paramount Skydance continued to sweeten its offer, eventually securing a seven-day negotiation window that resulted in a higher bid.
If approved, the merger would unite a vast portfolio of media assets — including CNN, HBO, Nickelodeon and CBS — under the control of a group led by tech billionaire Larry Ellison and his family.
The transaction would also combine two major streaming platforms — HBO Max and Paramount+ — and bring together two leading US news operations, CNN and CBS News.
“Once our board votes to adopt the Paramount merger agreement, it will create tremendous value for our shareholders,” ZWBD CEO David Zaslav said, expressing optimism about the combined company’s storytelling and scale.
Without a counteroffer from Netflix, WBD is now free to terminate its agreement with the streaming company and formally proceed with Paramount Skydance.
Despite the board’s backing, the deal is expected to face intense antitrust scrutiny in Washington and in key US states such as California, as well as in several foreign jurisdictions.
The merger would consolidate two major Hollywood studios and significantly expand Paramount Skydance’s footprint across film, television, streaming and news — raising competition concerns.
Political sensitivities may also complicate the review. Democratic Senators Elizabeth Warren, Bernie Sanders and Richard Blumenthal have expressed concerns that approval could be influenced by political considerations, citing the Ellison family’s ties to President Donald Trump.
In its revised offer, Paramount Skydance increased the reverse termination fee payable if the deal fails to secure regulatory clearance to $7 billion from $5.8 billion. It also agreed to provide $2.8 billion to WBD to cover the cost of terminating the Netflix agreement.
Netflix’s exit underscores its disciplined capital allocation strategy, while the Paramount Skydance–WBD merger, if cleared, could mark one of the most consequential consolidations in modern media history.