The proposed merger between Netflix and Warner Bros. Discovery, which had promised to create a global content giant, has collapsed. Warner Bros. will now be acquired by Paramount-Skydance, its rival bidder.
According to Reuters on the 26th (local time), Netflix co-CEOs Ted Sarandos and Greg Peters issued a joint statement announcing their withdrawal from the bidding war, stating that "at prices comparable to Paramount's latest offer, [the Warner Bros. acquisition] is not financially attractive."
Paramount recently offered $31 per share for Warner Bros.—$3.25 higher than the $27.75 per share Netflix had agreed to in December last year. Warner Bros.' board of directors determined that Paramount's offer was more favorable than its existing agreement with Netflix.
Some analysts suggest the Trump administration strongly influenced Netflix's decision to withdraw. Market observers had widely expected Netflix to complete the acquisition given its substantial cash reserves.
However, President Trump pressured for the dismissal of Susan Rice, former National Security Advisor who joined Netflix's board during the Barack Obama and Joe Biden administrations, after she criticized companies cooperating with the Trump administration. Trump warned that "Netflix will pay a price if it doesn't immediately fire Rice, who is a racist and deranged."
Adding credibility to this view, the withdrawal decision came immediately after CEO Sarandos met at the White House on the 26th to discuss the Warner Bros. acquisition. President Trump maintains close ties with Paramount CEO David Ellison and his father, Oracle founder Larry Ellison.