Netflix has backed away from its proposal to buy Warner Bros Discovery, clearing the way for Paramount Skydance to win a months-long battle for one of Hollywood’s most storied studios in a deal worth around $111bn (£82.2bn).
Warner Bros, which put itself up for sale last year, on Thursday said Paramount’s latest bid was “superior” to the one from Netflix, which in turn refused to raise its offer.
Netflix executives say they have declined to match Paramount’s bid as “the deal is no longer financially attractive” at that price.
The buyer would gain control of the iconic studio along with its films and media networks – a takeover that could significantly reshape the media landscape.
Last December, Warner Bros agreed to a takeover offer from Netflix for some of its assets, in a deal worth roughly $82bn (£61bn) including debt.
Paramount then made a rival proposal, which was rebuffed by Warner Bros, but an increased offer was made earlier this week, boosted by $1 per share.
“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” Netflix co-chief executives Ted Sarandos and Greg Peters said in a statement. “However, we’ve always been disciplined.”
“This transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price,” the Netflix executives added.
The announcement came just hours after Sarandos had visited the White House on Thursday.
It caps off a dramatic months-long saga that – if approved by regulators – is likely to reshape Hollywood.
But California Attorney General Rob Bonta said later on Thursday that the potential merger “is not a done deal”.
“These two Hollywood titans have not cleared regulatory scrutiny – the California Department of Justice has an open investigation, and we intend to be vigorous in our review,” he wrote in a social media post.
Bonta had said earlier this month that his office would review any deal involving Warner Bros as the entertainment industry represents a “critical sector” for California’s economy.
Paramount would also need approval from the US Department of Justice as well as European regulators.
