Paramount has officially secured a deal to acquire Warner Bros. Discovery (WBD) for $31 per share, following a heated bidding war that saw Netflix ultimately withdraw from negotiations.
The Bidding War Unfolds
The battle for WBD began when the board initially favored an $82.7 billion offer from Netflix, which targeted only the firm’s film, television, and streaming assets. However, Paramount countered with a comprehensive $108 billion bid for the entire company. To solidify its position, Netflix eventually pivoted to an all-cash offer of $27.75 per share, but the WBD board remained wary of Paramount’s substantial debt load and the complex backing of its investors, which include sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi.
Throughout the process, Paramount ramped up its efforts, filing a lawsuit in January to gain transparency into the Netflix negotiations. By February, Paramount sweetened the pot significantly, offering a $0.25 per share “ticking fee” for every quarter the deal remains unclosed past December 31, 2026, and pledging to cover a $2.8 billion breakup fee.
The final breakthrough came when Paramount increased its bid to $31 per share. Netflix, citing financial discipline, declined to match the offer and exited the race. “At the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive,” Netflix co-CEOs Ted Sarandos and Greg Peters said in a statement.
Under the terms, Paramount will assume WBD’s $33 billion debt. The acquisition is backed by $54 billion in debt commitments from major financial institutions, including Bank of America and Apollo Global Management, alongside $45.7 billion in equity from Larry Ellison.
Regulatory Hurdles and Other Concerns
Beyond the massive financial burden, the merger faces significant headwinds. Larry Ellison has already signaled that substantial job cuts are on the horizon, sparking fears regarding workforce stability and wage stagnation.
Political scrutiny is also intensifying. Critics have raised alarms over the influence of the Ellison family—major donors to Donald Trump—on the editorial independence of assets like CNN. Reports suggest that Trump has actively pressured media entities regarding their coverage, with concerns mounting that a new ownership structure could lead to a shift in journalistic integrity at the network.
Legal challenges are mounting as well. California Attorney General Rob Bonta confirmed that the state has an active investigation into the merger. Meanwhile, a coalition of 11 state attorneys general has urged the U.S. Department of Justice to intervene, citing fears that the deal will stifle competition and drive up subscription costs—a sentiment echoed by U.S. senators Elizabeth Warren, Bernie Sanders, and Richard Blumenthal in formal correspondence with the DOJ.
When is the deal expected to close?
The transaction is not yet finalized. While the original timeline with Netflix anticipated a stockholder vote by April, the pivot to Paramount necessitates a revised schedule. With regulatory reviews still pending, the final closing date remains subject to the outcome of ongoing government scrutiny.
