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Netflix Inc. (NASDAQ: NFLX) has confirmed it will not increase its acquisition offer for Warner Bros. Discovery (NASDAQ: WBD) after the media company determined that a revised proposal from Paramount Skydance Corp. (NASDAQ: PSKY) qualifies as a superior offer under their existing merger agreement.
In an official statement, Netflix co-CEOs Ted Sarandos and Greg Peters emphasized the company’s disciplined approach to mergers and acquisitions. While they believe the original Netflix-Warner Bros. Discovery deal would have delivered significant shareholder value and offered a clear path to regulatory approval, matching Paramount Skydance’s updated bid no longer makes financial sense. The executives stated that the higher price required to compete with PSKY’s offer makes the transaction unattractive for Netflix shareholders.
Warner Bros. Discovery’s board reached its decision after consulting independent financial and legal advisors. Earlier this week, WBD disclosed that Paramount Skydance’s proposal includes a cash offer of $31.00 per share, along with a quarterly ticking fee of $0.25 per share starting after September 30, 2026. The proposal also features a substantial $7 billion regulatory termination fee payable by PSKY if the deal fails to close due to regulatory issues. In addition, Paramount Skydance would cover the $2.8 billion termination fee owed to Netflix under the current merger agreement.
The offer is further supported by equity commitments from Larry J. Ellison and an affiliated trust to ensure required solvency conditions are met. Notably, the proposal’s material adverse effect clause excludes performance from WBD’s Global Linear Networks segment.
Despite stepping away from the deal, Netflix expressed appreciation for Warner Bros. Discovery CEO David Zaslav, CFO Gunnar Wiedenfels, and the board for conducting a thorough review process. Netflix reiterated that the acquisition was a strategic opportunity at the right price, not a necessity. The streaming giant remains financially strong, plans to invest approximately $20 billion in films and series this year, and will resume its share repurchase program while continuing to expand its global streaming platform.
