Netflix Withdraws Warner Bros Bid; Paramount Acquires Studio for $111B

Netflix has withdrawn from the bidding war for Warner Bros. Discovery (WBD). Rival Paramount-Skydance will acquire Warner Bros. for $111 billion (approximately 159 trillion won).

Netflix co-CEOs Ted Sarandos and Greg Peters announced the withdrawal decision on the 26th (local time), stating, "Matching Paramount's offer is no longer financially attractive."

Following news of Netflix's exit from the bidding, the company's stock jumped more than 10% in after-hours trading.

In an official statement, Netflix explained, "This deal was a 'nice-to-have' at the right price, not a 'must-have' at any price." The company determined there was little benefit in countering with a higher bid after Paramount raised its offer from $30 to $31 per share.

Netflix had previously signed an agreement in December last year to acquire Warner Bros. assets, excluding cable TV networks, at $27.75 per share. However, after Paramount launched a hostile takeover bid and raised the acquisition price, Warner Bros.' board concluded that Paramount's offer was more favorable to shareholders than the Netflix deal.

Netflix had the right to submit a new offer within four business days but chose not to exercise it. Paramount agreed to cover the breakup fee that Warner Bros. would owe for terminating the contract. Paramount also pledged to pay $7 billion (approximately 10 trillion won) in compensation if regulators block the merger.

With this transaction, Paramount acquires the century-old major media company Warner Bros. less than one year after completing its merger with Skydance.

Skydance, founded in 2006 by David Ellison, son of Oracle founder Larry Ellison, merged with Paramount Global last year and owns popular cable channels including CBS, MTV, Nickelodeon, and Comedy Central.