Paramount agrees $111bn WB mega deal as Netflix walks away

May 2026 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

May 2026 Issue

The long‑running uncertainty surrounding the future of Warner Bros Discovery effectively reached its next decisive stage after Paramount confirmed that it had agreed to acquire the company for a revised valuation of about $111bn.

This latest offer, amounting to $31 per share in cash, was judged by the Warner Bros Discovery board to be superior to its previously announced transaction with Netflix, leading Netflix to withdraw from the bidding process altogether.

The revised proposal followed months of increasingly competitive negotiations, during which Paramount repeatedly sought to secure the entire Warner Bros Discovery portfolio. The new bid displaced an earlier agreement under which Netflix intended to purchase Warner Bros Discovery’s studio and streaming operations for $27.75 per share. Netflix retained matching rights under the terms of its agreement but declined to raise its offer, confirming that the higher valuation required to compete with Paramount’s terms rendered the deal financially unattractive.

In increasing its bid, Paramount committed to paying a $7bn regulatory termination fee should the merger fail to receive approval from competition authorities. It also accepted responsibility for the $2.8bn breakup fee that Warner Bros Discovery would have owed Netflix if the earlier agreement had collapsed. The decision by Netflix to grant Warner Bros Discovery a seven‑day waiver to re‑enter discussions with Paramount paved the way for the revised offer.

Paramount’s proposal covers the entirety of the Warner Bros Discovery business, incorporating major pay‑television assets, including CNN, TBS and TNT. Netflix’s previous bid applied only to the film studio and the HBO Max streaming service. Paramount has emphasised that keeping Warner Bros Discovery intact better serves long‑term shareholder interests.

“From the very beginning, our pursuit of Warner Bros Discovery has been guided by a clear purpose: to honor the legacy of two iconic companies while accelerating our vision of building a next‑generation media and entertainment company,” said David Ellison, chairman and chief executive of Paramount. He added that combining the companies’ studios, platforms and creative talent would generate substantial value for audiences, business partners and shareholders.

David Zaslav, president and chief executive of Warner Bros Discovery, described the agreement as a positive outcome for both shareholders and the wider entertainment sector. “Our guiding principle throughout this process has been to secure a transaction that maximizes the value of our iconic assets and our century‑old studio while delivering as much certainty as possible for our investors,” he said, noting that he looked forward to the next stages of the merger process.

Ted Sarandos and Greg Peters, co‑chief executives of Netflix, expressed confidence in the merits of their own proposal but affirmed their decision to withdraw. They described their bid as a “nice to have” rather than a strategic necessity and reiterated their belief that they would have been strong custodians of Warner Bros’ significant brand portfolio.

The forthcoming regulatory review is expected to shape the pace and feasibility of the takeover. Mr Ellison has stated that he is “absolutely confident” that the merger will be approved in the US and internationally. Nevertheless, the deal is anticipated to attract considerable scrutiny, particularly regarding the proposed integration of HBO Max and Paramount+, a development that may reduce consumer choice and intensify concerns about consolidation in the streaming sector. Paramount has indicated that both the Warner Bros and Paramount film studios would be maintained following completion.

The announced deal has reinforced industry expectations that further consolidation across major media groups is increasingly inevitable as companies navigate rising production costs, shifting audience habits and the accelerating shift toward digital distribution. Observers note that this development reflects a broader strategic realignment across global entertainment markets as competition intensifies.

Richard Summerfield