Netflix Backs Down from Warner Bros. Discovery Bid, Paramount Skydance Set to Acquire
Netflix has withdrawn from its agreement to acquire parts of Warner Bros. Discovery (WBD), clearing the path for Paramount Skydance to proceed with a full acquisition of the media conglomerate. The decision, announced on Thursday, February 26, 2026, follows Warner Bros. Discovery’s board deeming Paramount Skydance’s revised offer a “superior proposal.”
Paramount Skydance’s Winning Bid
Paramount Skydance’s winning bid stands at $31 per share, valuing Warner Bros. Discovery at approximately $111 billion, including debt [CBS News]. This surpasses Netflix’s previous offer of $27.75 per share, which valued the company at $83 billion, including debt [CNBC]. Paramount Skydance has likewise agreed to pay a $2.8 billion breakup fee to Warner Bros. Discovery should the deal with Netflix not move through [CNBC].
Netflix’s Decision
Netflix co-CEOs Ted Sarandos and Greg Peters stated that while they believe they would be strong stewards of the Warner Bros. Brands, the transaction was always a “nice to have” rather than a “must have” [Netflix]. They indicated that at the price required to match Paramount Skydance’s offer, the deal was no longer financially attractive [CBS News].
What’s at Stake: A Transformed Hollywood Landscape
The acquisition by Paramount Skydance encompasses the entirety of Warner Bros. Discovery, including its pay-TV networks such as CNN, TBS, and TNT, as well as streaming platform HBO Max and iconic film and television franchises like “Harry Potter” [CNBC]. This differs from Netflix’s initial interest, which focused solely on the studio and streaming assets.
Regulatory Hurdles and Concerns
The merger still requires approval from federal antitrust enforcers and Warner Bros. Discovery shareholders. While Paramount Skydance executives argue the combination will benefit consumers and the entertainment industry [CBS News], some industry groups and lawmakers have raised concerns about potential anti-competitive effects [CBS News].
Market Reaction
Following the announcement, Netflix shares experienced a surge, increasing by more than 10% in extended trading [CNBC]. Conversely, Warner Bros. Discovery shares fell [CNBC].