Paramount set for $111bn Warner Bros takeover after Netflix drops bid

February 27, 2026

Netflix has withdrawn from its bid to acquire Warner Bros Discovery after Paramount Skydance submitted a superior offer valued at approximately $111 billion, concluding a protracted bidding war for the historic Hollywood studio. Netflix executives stated they declined to match Paramount's increased bid because the deal was no longer financially worthwhile at the higher price point. The proposed Paramount-Warner Bros merger, which would consolidate major entertainment assets including CNN, HBO Max, and various film studios, still requires approval from California and federal regulators who have opened investigations into the transaction.

Who is affected

Warner Bros Discovery shareholders
Netflix (losing bidder)
Paramount Skydance (winning bidder if approved)
CNN employees and leadership, including CNN head Mark Thompson
CBS News employees (already experienced layoffs from previous Paramount-Skydance merger)
Warner Bros employees facing potential job cuts
Larry Ellison and David Ellison (Paramount backers)
California entertainment industry workers
HBO Max streaming customers
Jared Kushner's investment firm Affinity Partners (previously backed out)
President Donald Trump (indirect interest due to CNN ownership concerns)

What action is being taken

Warner Bros has declared Paramount's bid as "superior" to Netflix's offer
California Attorney General Rob Bonta's Department of Justice is conducting an open investigation into the potential merger
Federal regulators at the US Department of Justice are reviewing the deal
European regulators are reviewing the deal for approval
CNN head Mark Thompson is communicating with employees about the uncertain future

Why it matters

This transaction represents a major consolidation in the entertainment industry that could fundamentally reshape Hollywood's media landscape by combining two major studios and their extensive portfolios of streaming services, television networks, and film production capabilities. The deal carries significant implications for media independence, particularly concerning CNN's future editorial direction given the political connections between Paramount's backers and the Trump administration, which has openly criticized the news network. The merger will likely result in substantial job losses in an entertainment industry already struggling with production cuts, affecting California's economy where entertainment is a critical sector. The outcome will determine whether one of America's most influential news organizations maintains its independence or falls under the control of a company with close ties to political figures who have been hostile toward its journalism.

What's next

Paramount's deal requires approval from California regulators (Department of Justice investigation ongoing)
US Department of Justice must approve the transaction
European regulators must grant approval
If the deal fails, Paramount has agreed to pay Warner Bros a $7 billion breakup fee
Paramount would also cover the $2.8 billion fee Warner Bros owed to Netflix for breaking their merger agreement

Read full article from source: BBC