Netflix Withdraws from Pursuit of Warner Bros. Following Paramount’s $111 billion offer, a $2.8 billion breakup fee has been secured

Netflix has decided to withdraw from its pursuit of a takeover of Warner Bros. Discovery following Paramount’s more favorable $111 billion bid, resulting in a $2.8 billion breakup fee.

Netflix has withdrawn its attempt to acquire Warner Bros. Discovery following the entertainment giant’s board decision that a more favorable offer from Paramount Skydance was superior.

On Thursday, Netflix announced its decision to withdraw from the acquisition contest, stating that it will receive a $2.8 billion breakup fee after ending its previously agreed deal with Warner Bros. Discovery.

The development followed the announcement from Warner Bros. Discovery’s board, indicating that Paramount Skydance’s recent proposal of $111 billion had exceeded Netflix’s previous offer of $82.7 billion.

“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,” said Netflix co-CEOs Ted Sarandos and Greg Peters in a joint statement.

The takeover battle for Warner Bros. Discovery has developed over several months in light of the company’s strategy to restructure its operations.

In June 2025, David Zaslav, President and CEO of Warner Bros. Discovery, revealed intentions to divide the company, distinguishing its streaming and studios operations from its other television and sports brands.

The proposed spin-off aims to establish a new entity, Discovery Global, which will encompass assets such as CNN, TNT Sports, Discovery’s European free-to-air channels, and digital platforms like Discovery+ and Bleacher Report.

In October 2025, Paramount Skydance submitted an unsolicited offer of nearly $60 billion, equating to $24 per share, for Warner Bros. Discovery. The proposal was rejected by the board, as indicated by reports.

The rejection sparked a broader bidding war that included Netflix and Comcast.

On December 5, 2025, Netflix and Warner Bros. Discovery announced a definitive agreement for a cash-and-stock transaction valued at $27.75 per share, resulting in an enterprise value of approximately $82.7 billion for Warner Bros. Discovery.

The companies indicated that the deal was projected to finalize following the spin-off of Discovery Global, which is expected in the third quarter of 2026.

Just three days following the announcement of the agreement, Paramount Skydance initiated a hostile all-cash takeover bid for the entire company, which includes Discovery Global, proposing $30 per share and valuing the business at $108.4 billion.

In January, the conflict intensified as Paramount initiated legal action against Warner Bros. Discovery contended that its all-cash offer of $30 per share was more advantageous than Netflix’s proposal of $27.75 per share.

This week, Paramount raised its offer to $31 per share, leading Warner Bros. Discovery to state that the proposal “could reasonably be expected to lead to a ‘company superior proposal’.”

After that decision, Netflix chose not to increase its offer.

“We are confident that we would have effectively managed Warner Bros.’ iconic brands, and that our agreement would have bolstered the entertainment industry while preserving and generating additional production jobs in the U.S.” “This transaction was always viewed as a ‘nice to have’ at the right price, rather than a ‘must have’ at any price,” stated Sarandos and Peters.

The executives also stated that Netflix intends to maintain significant investment in its core business, including an expenditure of approximately $20 billion this year on films and television series as it broadens its entertainment offerings.

Paramount Skydance announced that its proposal encompasses financing the termination fee owed to Netflix.

Investors reacted favorably to the development. During after-hours trading, Netflix shares increased by over 8 percent, while Paramount’s stock saw a rise of 6 percent. Shares of Warner Bros. Discovery, on the other hand, decreased by 1.7 percent.