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is a news writer who covers the streaming wars, consumer tech, crypto, social media, and much more. Previously, she was a writer and editor at MUO.
Netflix has dropped its $83 billion deal to acquire the Warner Bros. studio, HBO, and its streaming service HBO Max. In an announcement on Thursday, co-CEOs Ted Sarandos and Greg Peters say the streamer is “declining to match” the new bid made by Paramount:
The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. 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.
We believe we would have been strong stewards of Warner Bros.’ iconic brands, and that our deal would have strengthened the entertainment industry and preserved and created more production jobs in the U.S. But this transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.
Though WBD agreed to its deal with Netflix last December, the David Ellison-led Paramount came back with a hostile bid to take over the entire company — not just parts of it. After a barrage of bids and even a lawsuit, WBD eventually gave Paramount one last chance to present its “best and final offer.”
Now, WBD says Paramount’s $31 per share all-cash bid represents a “superior” proposal. Under the deal, Paramount will cover the $7 billion regulatory termination fee in case its deal with WBD doesn’t close, along with the $2.87 billion termination fee it must pay Netflix for abandoning its deal. It also includes “a daily ‘ticking fee’ of $0.25 per quarter” that will “accrue after September 30, 2026, until the consummation of the Paramount transaction.”
In January, Netflix revised its acquisition agreement to an all-cash deal in response to increasing pressure from Paramount, while Sarandos testified before the Senate earlier this month to address concerns about the megamerger.
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