Paramount acquires Warner Bros. Discovery as Netflix walks away

The bidding war for Warner Bros. Discovery has concluded. Paramount, owned by David Ellison, will acquire the company after Netflix declined to raise its bid and walked away from the deal. On Thursday, Warner Bros. Discovery announced that Paramount Skydance’s newest offer of $31 a share was a superior proposal, giving Netflix four business days to counter. Netflix, which announced its intent to acquire Warner Bros. Discovery in December with an $82.7 billion all-cash bid, declined to match the new offer, which surpassed Paramount’s previous offer of $108 billion.

The transaction restructures the ownership of major media assets, including studios, HBO, streaming services, and linear television networks—defined as traditional broadcast and cable channels—such as CNN, TBS, TNT, Discovery, and HGTV. The financial breakdown of the acquisition includes:

• Valuation: An implied valuation of about $111 billion for Warner Bros. Discovery, based on the newest bid of $31 a share.
• Debt Assumption: Paramount will assume about $33 billion in debt held by Warner Bros. Discovery.
• Termination Fee: Warner Bros. Discovery must pay a $2.8 billion termination fee—a penalty paid if a deal is cancelled—to Netflix to end their existing agreement.
• Financing: The deal is backed by a $57.5 billion debt commitment from Bank of America Merrill Lynch, Citi, and Apollo Global Management. Larry Ellison, the Oracle executive chair whose net worth is $201 billion, has also agreed to supply additional equity to fulfill the bid.

Netflix co-CEOs Ted Sarandos and Greg Peters explained the decision to walk away from the transaction, noting that while their negotiated deal would have created shareholder value, they chose to remain disciplined. “However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid,” the co-CEOs said in a statement. Following the announcement, Netflix shares jumped as much as 10% in after-hours trading in New York, while shares in Paramount, which has a market cap of about $12 billion, were up 4.5%.

The acquisition consolidates significant media power under David Ellison, whose Paramount already owns major studios, entertainment, and news businesses. His ownership of news network CBS has also attracted controversy and has largely been seen as a sympathetic turn toward the Trump administration, with reporting critical of the administration shelved or facing increased scrutiny by Ellison and CBS’s editor-in-chief, the conservative provocateur Bari Weiss.

Why it matters

The acquisition consolidates major media assets under the Ellison-led Paramount, signaling a shift in the streaming and linear TV landscape while highlighting the high cost of exit for failed bidders.