Paramount set for $111bn Warner Bros takeover after Netflix drops bid
Netflix chose not to increase its offer, with executives stating that matching Paramount's bid made the deal financially unattractive.
If successful, the acquisition would give Paramount control over the iconic Warner Bros studio, its extensive film catalog, and media networks, marking a major shift in the media industry landscape.
Last December, Warner Bros agreed to a $82 billion (£61 billion) takeover offer from Netflix for some of its assets, including debt. Paramount then made a rival proposal, initially rejected by Warner Bros, but recently increased its offer by $1 per share.
Netflix co-CEOs Ted Sarandos and Greg Peters stated that while the Netflix-Warner Bros deal would have created shareholder value and had a clear path to regulatory approval, they remained disciplined and viewed the transaction as a "nice to have" at the right price, not a "must have" at any cost.
The announcement followed Sarandos’s visit to the White House, underscoring the high-profile nature of the negotiations. The deal, if approved by regulators, could significantly reshape Hollywood's landscape.
However, California Attorney General Rob Bonta emphasized that the merger is not finalized. His office has an open investigation and plans to conduct a thorough regulatory review, highlighting the entertainment industry’s critical economic role in California.
Paramount's bid would require approval not only from the US Department of Justice but also from European regulators, meaning regulatory hurdles remain before the deal can be completed.
A potential deal between Paramount and Warner Bros could significantly impact CNN, as Warner Bros currently owns the network. Paramount, aiming to become a major Hollywood player, is backed by tech billionaire Larry Ellison and led by his son David Ellison.
The financing behind Paramount's bid has raised concerns due to Larry Ellison’s close ties to former US President Donald Trump, a major Republican donor who has frequently criticized CNN. Trump publicly stated in December that CNN should be sold as part of any Warner Bros deal, calling its leadership "corrupt or incompetent."
Amid news of the likely Paramount acquisition, CNN’s head Mark Thompson advised employees not to "jump to conclusions about the future until we know more."
Paramount’s initial hostile bid was also supported by Jared Kushner, Trump’s son-in-law and adviser, through his investment firm Affinity Partners, which later withdrew amid scrutiny.
Paramount’s 2025 merger with Skydance faced regulatory scrutiny, including negotiations with the Trump administration's Federal Communications Commission (FCC). As part of concessions, Paramount agreed to a $16 million settlement on behalf of CBS News after Trump sued over a “60 Minutes” interview with Kamala Harris, alleging election interference. The merger later led to leadership changes and layoffs at CBS News.
Paramount CEO David Ellison welcomed Warner Bros’ board’s decision favoring Paramount’s improved offer, emphasizing the superior value and quicker closing it provides to shareholders.
If regulators approve the deal, Paramount would integrate Warner Bros’ HBO Max streaming customers and take ownership of CNN, the Food Network, and various sports networks. Paramount’s existing portfolio includes networks like Nickelodeon, CBS, and Comedy Central, marking a significant expansion of its media holdings.
Critics worried that a Netflix acquisition could lead to the loss of Warner Bros' storied cinema legacy, accelerating the decline of traditional movie-making in favor of Silicon Valley streaming dominance. Conversely, a merger with Paramount, which positions itself as one of the last major Hollywood studios, raised concerns over its perceived political ties to the Trump administration—particularly regarding the future of CNN and broader media implications.
The sale of Warner Bros is expected to have profound effects across Hollywood, likely resulting in significant staff cuts amid ongoing production slowdowns in the city.
In December, Warner Bros agreed to sell its film and streaming divisions, including HBO, to Netflix for about $82 billion (£61 billion), valuing shares at $27.75 each. The remaining parts of Warner Bros, including traditional TV networks and CNN, were to be spun off as an independent company.
However, in a late move, Paramount increased its offer to $31 per share in cash to acquire the entire company, up from $30 per share. Paramount also agreed to pay $7 billion if the deal falls through and cover a $2.8 billion breakup fee that Warner Bros had committed to paying Netflix if their merger plan collapsed.
This high-stakes contest underscores the uncertainty and major shifts underway in Hollywood’s future.
(Additional reporting by Osmond Chia)
