Netflix has withdrawn its proposal to acquire Warner Bros Discovery, clearing the path for Paramount Skydance to win a months-long battle for one of Hollywood's most storied studios in a deal worth approximately $111bn.
Warner Bros, which put itself up for sale last year, said on Thursday that Paramount's latest bid was "superior" to Netflix's offer, with Netflix refusing to raise its bid.
Netflix executives stated they declined to match Paramount's bid as "the deal is no longer financially attractive" at that price.
The buyer would gain control of the iconic studio along with its films and media networks—a takeover that could significantly reshape the media landscape.
Last December, Warner Bros agreed to a takeover offer from Netflix for some of its assets in a deal worth roughly $82bn including debt.
Paramount then made a rival proposal, which was rejected by Warner Bros, but an increased offer was made earlier this week, boosted by $1 per share.
Netflix co-CEOs Ted Sarandos and Greg Peters said in a statement: "The transaction we negotiated would have created shareholder value with a clear path to regulatory approval. However, we've always been disciplined."
California Attorney General Rob Bonta said on Thursday evening that the potential merger "is not a done deal." He wrote in a social media post: "These two Hollywood titans have not cleared regulatory scrutiny—the California Department of Justice has an open investigation, and we intend to be vigorous in our review."
Paramount would also need approval from the US Department of Justice and European regulators.
A deal between Paramount and Warner Bros could have serious ramifications for the future of one of the US's largest news brands—CNN. Warner Bros is the network's parent company.
The funding of Paramount's offer has drawn scrutiny, partly due to close ties between US President Donald Trump and Larry Ellison, a major Republican donor.
Paramount CEO David Ellison welcomed the Warner Bros board's decision in favor of Paramount's sweetened offer. He said in a statement that the proposal offers Warner Bros shareholders "superior value, certainty, and speed to closing."
Source: www.bbc.com