Netflix‘s plan to acquire Warner Bros. for $82.7 billion was successfully thwarted by competitor Paramount Skydance after an unusual bidding war. Warner Bros. Discovery has agreed to be acquired by Paramount Skydance in a $110 billion deal signed Friday morning, according to a report from Reuters.
Warner Bros. Discovery’s board said Tuesday it had a revised “superior offer” from Paramount Skydance. WBD executives gave Netflix a few days to respond, but the streaming provider ultimately declined. On Thursday, Netflix also stopped further payments.
“The transaction we negotiated would have created value for shareholders and provided a clear path to regulatory approval. […] However, we have always acted with discipline and at the price required to match Paramount Skydance’s recent offer, the deal is no longer financially attractive. Therefore, we decline to beat Paramount Skydance’s offer.”
Ted Sarandos and Greg PetersNetflix CEOs
Netflix still gets $2.8 billion
Paramount must pay Warner Bros. $2.8 billion in compensation that Warner Bros. owed Netflix for exiting the previous contract. Paramount also increased additional compensation that would have been due if the takeover failed by regulators from $5.8 billion to $7 billion. Paramount’s takeover bid for Warner Bros. Discovery includes a whopping $29 billion in debt. If everything works out, this will ultimately lead to cost savings for the merged Paramount Skydance Warner Bros. Discovery company.
Netflix and Warner Bros. announced a takeover agreement in December that would have given Netflix control of Warner’s vast intellectual property, including the DC universe and the film and television rights to Harry Potter, as well as HBO, the streaming service HBO Max and Warner Bros. itself – a 102-year-old film studio and theatrical distributor. The agreement would also have Warner Bros.’ Games division (Mortal Kombat, Harry Potter), but not the television channels of Warner Bros. Discovery.
After this announcement, Paramount Skydance tried to come into play with a higher offer – including the television channels. Paramount’s bid was supported by the Ellison family: David Ellison runs Paramount, and his father, billionaire Larry Ellison, is the founder and CTO of Oracle.
Also involved was the private equity firm of Jared Kushner, US President Donald Trump’s son-in-law, as well as Saudi Arabia, Qatar and the United Arab Emirates, which have invested billions of dollars in Trump’s family business. Given this, it shouldn’t surprise anyone if Paramount Skydance’s bid for Warner Bros. Discovery passes the antitrust authorities without a hitch.
Those
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