Netflix Withdraws from Warner Bros. Acquisition Battle... Paramount Takes the Lead

With Netflix withdrawing from acquiring Warner Bros. Discovery (hereafter Warner Bros.), the likelihood has increased that Paramount Skydance (hereafter Paramount) will emerge as the winner in the acquisition race.

Reuters Yonhap News

On the 26th (local time), Netflix stated, "We have always maintained a cautious approach. At the price level required to match Paramount's latest offer, the deal is no longer financially attractive."

The company also said that it will continue to invest in its own business, including approximately 20 billion dollars in films, TV programs, and other entertainment content this year.

In December of last year, Netflix signed a contract to acquire Warner Bros.' studio and streaming business at 27.75 dollars per share, for a total of 82.7 billion dollars. However, with Paramount issuing a counteroffer targeting the entire company, the competitive landscape continued.

Subsequently, Paramount presented a new offer of 31 dollars per share. As the Warner Bros. board of directors reviewed this, the competition persisted. Initially, there was widespread expectation that Netflix, having emphasized its strong cash position, would participate in a second round of bidding. However, on this day, the company announced its decision to withdraw from the acquisition.

Following the termination of the contract, Netflix will receive a 2.8 billion dollar breakup fee from Warner Bros. Paramount had previously indicated its willingness to cover this breakup fee for Warner Bros. In addition, Paramount will pay a 7 billion dollar termination fee if regulatory approval is not obtained. It is also known that, if the closing of the deal is delayed beyond September 30, Paramount will pay 25 cents per share for each quarter of delay.

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