Warner Bros Discovery has agreed to a $110 billion acquisition by Paramount Skydance, ending a high-stakes bidding war that saw Netflix withdraw from its earlier agreement. The deal, announced on Friday, follows Netflix's decision not to match Paramount's latest $31-per-share offer, which Warner Bros deemed superior to the streaming pioneer's $27.75-per-share bid.
Bruce Campbell, Warner Bros' chief revenue and strategy officer, confirmed the development in a company townhall: 'Netflix had the legal right to match the PSKY offer. As you all know, they ultimately decided not to do that. That then resulted in a signed agreement with PSKY as of this morning.'
The merger, which includes some $29 billion in debt, is set to create one of the largest film studios in the world. Paramount will gain access to Warner's intellectual property, including franchises such as 'Fantastic Beasts' and 'The Matrix', and will be able to combine HBO Max with Paramount+ to compete with market leader Netflix.
However, the deal has drawn scrutiny in the US. California State Attorney General Rob Bonta said the state is already investigating and will be 'vigorous' in its review. Paramount, led by David Ellison, has deep political connections to the Trump administration, which could help secure federal approval. European Union antitrust approval is expected to be straightforward, with any required divestments likely to be minor.
Paramount launched a hostile campaign to acquire Warner Bros late last year, consistently raising its offer. In its revised bid, it raised the termination fee to $7 billion from $5.8 billion and paid the $2.80 billion termination fee Warner Bros owed Netflix. Lawmakers have expressed concerns about reduced competition and higher prices for consumers, while cinema operators worry about job losses and fewer film releases.
