Paramount has initiated a hostile takeover bid for all of Warner Bros. Discovery (WBD), challenging Netflix's recent agreement to acquire WBD's streaming and film businesses. The bid values WBD at $108.4 billion, a 139 percent premium over its September stock price. Paramount argues its offer provides better value for shareholders amid antitrust concerns surrounding the Netflix deal.
Netflix announced last week an agreement to purchase WBD's streaming and movie studio businesses, along with its film and TV libraries, for an equity value of $72 billion and an enterprise value of approximately $82.7 billion. The deal encompasses HBO and HBO Max but excludes WBD's cable channels, which will be separated into a new entity called Discovery Global by the third quarter of 2026.
Paramount, having previously submitted six proposals over 12 weeks without meaningful engagement from WBD, has now taken its offer directly to WBD shareholders and the board. The proposal seeks to acquire the entirety of WBD, including the forthcoming Discovery Global, at $30 per share. Paramount's CEO and chairman, David Ellison, stated that the Netflix deal could harm shareholders due to the uncertain future value of WBD's linear cable business.
In response, Netflix co-CEO Ted Sarandos described Paramount's bid as expected, emphasizing that the Netflix agreement protects jobs in the entertainment industry and benefits consumers. Warner Bros. CEO David Zaslav has indicated that HBO Max will continue to operate even after the Netflix deal.
Antitrust scrutiny looms large. Paramount highlighted potential regulatory hurdles for Netflix, noting that the acquisition would combine the dominant subscription video-on-demand player with a major competitor in several European Union countries, potentially leading to higher prices and reduced pay for creators. In the US, Netflix holds 301.63 million subscribers, WBD has 128 million (mostly HBO Max), and Paramount+ has 79.1 million. Paramount expressed confidence in securing swift regulatory approval, citing its recent merger with Skydance in August under the current US regulatory environment.
Political influences are evident. President Donald Trump recently criticized the Netflix-WBD merger, warning that Netflix's substantial market share could increase significantly. Trump also lashed out at Paramount over a 60 Minutes interview. Meanwhile, Sarandos reportedly met with Trump recently, and the Ellison family maintains ties to the president.
Paramount, with its historical roots in the film industry dating to 1912, emphasized stronger commitments to theatrical releases, claiming a merger would result in more movies in theaters. Netflix has pledged to uphold WBD's current theater release schedule through 2029.
