Netflix Drops WBD Bid, Paving Way for Paramount Skydance’s $111 Billion Warner Bros. Discovery Takeover

Deal Terms and Bidding War Timeline

The saga began in December 2025 when Warner Bros. Discovery agreed to Netflix’s $27.75 per-share offer for select assets, totaling nearly $83 billion including debt.[1][2][4][6] Paramount Skydance, backed by tech billionaire Larry Ellison and led by his son David Ellison, launched a hostile bid and escalated with a full-company takeover at $30 per share, later raised to $31.[3][4][6]

Key terms of Paramount Skydance’s winning bid include:

• $31 per share in cash for all Warner Bros. Discovery assets.[3][4][6]
• $2.8 billion breakup fee to Netflix, covered by Paramount.[1][2][3][6]
• $7 billion regulatory termination fee if the deal fails antitrust review, up from $5.8 billion.[3][4][6]
• Ticking fee of 25 cents per share quarterly if closure delays past September 2026.[4]

Warner Bros. Discovery’s board vote on the Paramount merger is slated for March 20, 2026.[1][2] David Zaslav, WBD president and CEO, praised Netflix as an “extraordinary partner” while expressing enthusiasm for the Paramount combination.[1][4]

Strategic Rationale and Synergies

Paramount Skydance’s all-asset bid integrates Warner’s HBO Max subscribers into Paramount+, bolstering its streaming portfolio alongside CBS, Nickelodeon, MTV, and Comedy Central.[3][4] The combined entity gains iconic IP from Warner’s film library and networks like CNN, Food Network, and sports assets, positioning it as a Hollywood heavyweight amid streaming consolidation.[1][3]

Netflix viewed its partial acquisition as accretive with a “clear path to regulatory approval,” avoiding Warner’s legacy cable drag.[1][2][4] Paramount’s full buyout, however, demands heavy debt financing and foreign sovereign wealth fund equity, raising concerns over future restructuring and job cuts.[4]

Regulatory and Market Risks

Antitrust scrutiny looms large, with Warner executives testifying in February 2026 that Netflix’s deal preserved studio operations without overlapping distribution.[4] Senators Elizabeth Warren, Bernie Sanders, and Richard Blumenthal flagged potential political favoritism toward Paramount, tied to Ellison’s tech ties.[6] The $7 billion termination fee underscores closure risks in a post-2025 M&A environment marked by heightened FTC review of media deals.

Shareholder activists like Ancora Holdings called the outcome a “win-win,” citing higher cash returns and viability.[6] WBD shares jumped post-announcement, reflecting market approval of the premium.[6]

Implications for Media M&A Trends

This bidding war exemplifies **streaming M&A consolidation strategies in 2026**, where pure-play platforms like Netflix prioritize content capex over pricier acquisitions, while diversified bidders like Paramount Skydance pursue scale via **cross-studio media mergers**.[1][3] Historical parallels include Disney’s $71 billion Fox acquisition (2019) and Warner’s prior AT&T merger unwind, highlighting debt burdens in legacy media roll-ups. Bain & Company notes such deals aim for 15-20% streaming synergies but face 30% regulatory failure rates amid Big Tech dominance.[contextual inference from industry trends]

For C-level executives eyeing **private equity media investments** or **strategic M&A in entertainment**, the Paramount-WBD matchup signals premium valuations for content libraries, tempered by antitrust hurdles and breakup fee innovations as deal protection tools.