Netflix officially withdrew its $82.7billion bid for Warner Bros. Discovery (WBD) on February 26, 2026, effectively ending a months-long bidding war.
Netflix declined to match or exceed Paramount’s “superior” $31-per-share all-cash offer, which valued WBD at approximately $111billion including debt.
Co-CEOs Ted Sarandos and Greg Peters stated the deal was a “nice to have” at the right price, but was “no longer financially attractive” at the levels required to compete with Paramount.
As part of the exit, Paramount (on behalf of WBD) paid Netflix a $2.8billion termination fee to break the original merger agreement signed in December 2025.
Paramount now moves toward finalizing an agreement to acquire all of WBD, including CNN, HBO, and the Warner Bros. film studio.
Netflix Co-CEO Ted Sarandos’ White House Visit
According to CNBC, Netflix co-CEO Ted Sarandos met with White House and Justice Department officials on February 26 prior to the company’s withdrawal of its bid for Warner Bros. Discovery.
The company has been under political pressure and warned of regulatory hurdles regarding the merger.
While officially positioned as a pre-scheduled meeting, the White House told CNBC that Sarandos was not meeting with the President and that he was meeting with with staff members at the White House.
President Trump had recently demanded that Netflix fire Susan Rice (former Obama admin official) from its board “or pay the consequences”.
WBD issued a statement, just after Sarandos arrived at the White House, saying that Paramount Skydance’s latest bid was considered a “superior proposal” to Netflix’s offer and gave the latter four business days to improve its bid.
However, just after Sarandos’s White House visit, Netflix issued a statement to scuttle the deal altogether.
Final Deal Structure
The deal values WBD at $81billion in equity and $110billion in enterprise value, including debt.
Funded by $47billion in equity from the Ellison Family and RedBird Capital Partners, plus $54billion in debt commitments from Bank of America, Citigroup, and Apollo.
If the deal doesn’t close by 30 September 2026, shareholders receive $0.25 per share per quarter.
Paramount agreed to a $7billion regulatory termination fee if the deal is blocked.
The merged entity pledges to release at least 30 theatrical films annually (15 per studio) with a minimum 45-day exclusive theatrical window.
Combined Content Assets
The merger creates a media titan with a library of over 15,000 titles, unites Warner Bros. Pictures and Paramount Pictures, and adds HBO, CNN, TNT, TBS, Discovery, and DC Studios to Paramount’s existing portfolio (CBS, MTV, Nickelodeon).
Plans to merge Paramount+ with HBO Max (Max) into a single global platform, including Harry Potter, Game of Thrones, DC Universe, Star Trek, Mission: Impossible, and Lord of the Rings.
A massive portfolio including the NFL, Olympics, UFC, PGA Tour, NHL, and NCAA March Madness.
Market and Industry reaction
Netflix shares jumped over 10% following the announcement, as investors cheered the company’s fiscal discipline and the removal of a massive acquisition risk.
While some analysts believe Paramount has a “meaningfully easier” path than Netflix, significant obstacles remain.
The US Department of Justice (DOJ) and FTC are reviewing the “horizontal consolidation” of two major film studios and the impact on consumer pricing.
California Attorney General Rob Bonta has opened a “vigorous” investigation; the European Commission and UK’s CMA are also reviewing the merger.
The inclusion of Middle East equity in the financing may trigger a review by the Committee on Foreign Investment in the United States.
Critics, including Senator Elizabeth Warren, have labeled it an “antitrust disaster,” while others express concern over President Trump’s potential involvement given Larry Ellison’s ties to the administration.
Industry & Internal reactions
Staffers at CNN and CBS News have expressed fears of “disaster” due to potential consolidation and editorial changes under the new leadership.
Paramount anticipates $6billion in “synergies,” which is widely expected to result in thousands of layoffs across both companies.
The Writers Guild of America (WGA) has called for the merger to be blocked, citing a “loss of competition” that would harm creators.
Activist investor Ancora Holdings welcomed the deal as a “win-win” for shareholders compared to the previous Netflix offer.
Read also:
Netflix ups Warner Brothers bid to all-cash offer
Paramount launches lawsuit and proxy fight against WBD
Netflix acquires Warner Brothers Discovery
Paramount ups final bid to $31/share for WBD
