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Netflix has withdrawn from its bid for Warner Bros. Discovery (WBD) after WBD’s board determined that Paramount Skydance’s latest proposal qualified as a superior offer.
The decision clears the way for Paramount Skydance to pursue a transaction valued at about US$111 billion, including debt, subject to final approvals. Netflix said it would not match the revised terms because the deal was “no longer financially attractive.”
The market reacted quickly, signaling investor support for Netflix’s decision after a prolonged bidding process. Netflix shares closed at US$84.61, up 2.31% on the previous day, and then rose to US$91.40 in pre-market trading, a gain of 8.03% or US$6.79.
WBD notified Netflix that Paramount Skydance’s updated proposal met the threshold for a superior proposal under the existing merger agreement. That notice gave Netflix a chance to revise its own bid. Netflix then declined to increase its offer.
In its statement dated February 26, 2026, Netflix said the transaction it negotiated could have created shareholder value and offered a clear path to regulatory approval. However, the company said the price required to match Paramount Skydance’s latest bid no longer met its financial criteria. The statement also emphasized that Netflix remained disciplined in capital allocation.
The earlier Netflix agreement, announced in December 2025, carried an enterprise value of about US$82.7 billion, including debt. That proposal focused on WBD’s studio and streaming assets rather than the entire company. Paramount Skydance later pursued a broader structure and continued to raise its offer during the process.
WBD chief executive David Zaslav publicly thanked Netflix executives for their participation in the process. At the same time, he signaled support for the proposed Paramount-Skydance combination, describing it as a transaction expected to create greater value for shareholders once the board adopts the merger agreement.
Paramount Skydance’s revised proposal is reported at US$31 per share in cash and covers the full WBD business. That scope extends beyond studios and streaming and includes major television and news assets. If completed, the transaction would combine a large portfolio of film, television, streaming, and broadcast properties into a single corporate structure.
The revised bid also includes stronger deal protections. Paramount Skydance increased the termination fee tied to regulatory failure to US$7 billion, up from US$5.8 billion. It is also committed to providing US$2.8 billion to help WBD pay the termination amount owed to Netflix for ending the earlier agreement. These terms reduced execution risk for WBD and increased certainty around closing economics.
Reports on the financing package indicate larger equity and debt commitments to support the transaction. These changes came after repeated bidding rounds and helped Paramount Skydance present a stronger overall package than Netflix’s standing offer.
The merger still faces several regulatory reviews. The proposed combination would unite major studios, streaming platforms, and news operations, which may attract antitrust scrutiny in the United States and in other jurisdictions. Regulators will likely assess the effects of competition across content production, distribution, and advertising markets.
California authorities have already signaled that they are actively reviewing. The transaction may also require clearance from federal regulators in the United States and from European authorities before it can close. Political attention around the deal has also increased, but regulators have not issued a final decision.
Investor reaction reflected two different views. Netflix gained after investors welcomed its decision not to raise the bid, while Paramount also rose on expectations that it had secured the lead position in the contest for WBD. WBD shares moved lower after the board’s decision and Netflix’s withdrawal.
If regulators approve the merger, Paramount Skydance would gain control of WBD and reshape the media sector through a larger combined portfolio of entertainment and news assets. For now, the process moves from bidding competition to regulatory review and formal deal execution.
