In a flurry of deals worth tens of billions of dollars, the bidding war for Warner Bros. Discovery is over. David Ellison’s Paramount to acquire Warner Bros. Discovery.
On Thursday, Warner Bros. Discovery was announced that Paramount Skydance’s newest offer of $31 per share was a “superior offer,” giving Netflix four business days to counter. Netflix said at the time that it would not raise its $82.7 billion all cash offer for the legacy studio, and would walk away from the deal.
“The transaction we negotiated would have created value for shareholders with a clear path to regulatory approval,” Netflix co-CEOs Ted Sarandos and Greg Peters said in a statement Thursday. “However, we have always been disciplined and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive, so we decline to match Paramount Skydance’s offer.”
Under the terms of the original deal, Warner Bros. Discovery will have to pay a $2.8 billion termination fee to Netflix to end the existing deal. Paramount’s renewed offer – backed by the world’s sixth-richest man, Oracle’s executive chairman and David Ellison’s father, Larry Ellison – includes paying that severance fee.
In the new deal, Paramount, which was bought just last year by Ellison’s Skydance Media with heavy financial backing from his father, will acquire all of Warner Bros. Discovery, including studios, HBO, streaming service, gaming and entertainment divisions and linear television networks such as CNN, TBS, TNT, Discovery and HGTV.
Ellison, whose Paramount already owns major studios, entertainment and news businesses, has warned of major job cuts. His ownership of the CBS news network has also attracted controversy and has been widely seen as a sympathetic turn toward the Trump administration, with reports criticizing the administration shelf or face increased scrutiny from Ellison and CBS editor-in-chief conservative provocateur Barry Weiss. Larry Ellison is a major donor and supporter of President Trump.
Netflix had announced its intention get WBD in December bid nearly $83 billion for its studios and streaming service alone. Despite several hostile takeover offers from Paramount, Warner Bros. Discovery reaffirmed to shareholders its belief that Netflix’s offer was superior to Paramount’s, which offered $108 billion for the complete company, including its linear television networks. Paramount’s most recent offer, at $31 a share, values WBD at about $111 billion.
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Paramount will assume about $33 billion in debt held by Warner Bros. Discovery, according to the agreement. Larry Ellison, whose net worth is $201 billion, according to Bloombergagreed to provide the additional equity capital to meet Paramount’s bid. Paramount’s market capitalization is about $12 billion.
The deal is also funded at $57.5 billion debt commitment from Bank of America Merrill Lynch, Citi and Apollo Global Management.
Netflix shares jumped as much as 10% in after-hours trading in New York. Paramount shares rose 4.5%.
