Paramount Skydance has finalized a $110 billion agreement to acquire Warner Bros. Discovery, outbidding Netflix after months of competition. The deal, valued at $31 per share, includes commitments to theatrical releases but faces immediate antitrust scrutiny from state attorneys general. Netflix received a $2.8 billion termination fee upon walking away from its prior bid.
On February 27, 2026, Warner Bros. Discovery announced it had accepted a superior proposal from Paramount Skydance, led by David Ellison, for $31 per share in cash, totaling an enterprise value of $110 billion including $33 billion in debt. This followed Netflix's initial agreement in December 2025 for $27.75 per share, which Netflix declined to match within the four-day window, citing the deal as no longer financially attractive. Netflix co-CEOs Ted Sarandos and Greg Peters stated, “We’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive.” Paramount paid Netflix a $2.8 billion breakup fee as stipulated.
The acquisition marks the culmination of Paramount's hostile takeover bid, initiated with unsolicited offers last fall and escalated by a January lawsuit to force disclosure of Netflix's valuation. Negotiations occurred virtually from February 17 to 23, with Ellison's ninth offer including a quarterly ticking fee of $0.25 per share starting September 30, 2026, if the deal delays. Ellison emphasized honoring legacies, saying, “By bringing together these world-class studios... we will create even greater value for audiences, partners and shareholders.” Warner Bros. Discovery CEO David Zaslav noted the outcome maximizes value for shareholders.
Paramount committed to releasing at least 30 theatrical films annually across both studios, with a minimum 45-day exclusive window before VOD, and up to 60-90 days for major releases. The combined entity will manage assets including HBO Max, Paramount+, CNN, and franchises like Harry Potter and Star Trek, while addressing over $78 billion in debt through cost savings to reach a 4.4 times earnings ratio.
Opposition emerged swiftly. California's Attorney General Rob Bonta announced talks with attorneys general from New York, Washington, Virginia, and Pennsylvania to probe competition concerns, stating, “As the epicenter of the entertainment industry, California has a special interest in protecting competition.” Actor Mark Ruffalo urged coordination, warning the merger could “kill competition in the industry and drive down wages.” The Writers Guild of America East and West issued a joint statement: “The proposed Paramount-Warner merger would consolidate control... The loss of competition would be a disaster... This merger must be blocked.” Movie theaters plan to lobby against the deal, shifting focus from Netflix concerns. Analysts predict regulatory approval could take at least a year, with federal Democrats like Sen. Chris Murphy vowing to address such consolidations.
