Summary:
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Two iconic Hollywood studios, Warner Bros. Discovery and Paramount Skydance, agree to a $110 billion acquisition deal.
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Netflix declines to match Paramount’s offer, paving the way for the merger of two major studios.
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Regulators and lawmakers scrutinize the deal, with concerns raised about job losses and competition in the entertainment industry.
Two of the most iconic names in Hollywood history are officially joining forces. Warner Bros. Discovery agreed Friday to be acquired by Paramount Skydance in a deal worth approximately $110 billion, capping a dramatic months-long bidding war that also involved Netflix.
The agreement was announced during an internal town hall at Warner Bros. Bruce Campbell, the studio’s chief revenue and strategy officer, confirmed the news to employees. “Netflix had the legal right to match the PSKY offer. As you all know, they ultimately decided not to do that. That then resulted in a signed agreement with PSKY as of this morning,” Campbell said, according to an audio clip of the meeting reviewed by Reuters.
Paramount and Warner Bros. did not immediately respond to press requests for comment.
The road to this merger was anything but straightforward.
Netflix entered the picture in December 2025, announcing a roughly $83 billion deal to acquire Warner Bros.’ film studio and HBO Max. That agreement gave Netflix a window to negotiate — but it also included a clause allowing Warner Bros. to entertain competing offers if deemed superior.
Paramount Skydance, led by CEO David Ellison, son of Oracle billionaire and Trump ally Larry Ellison, had been pursuing Warner Bros. since late 2025, raising its bid multiple times. Its final offer came in at $31 per share in cash for the entirety of Warner Bros. Discovery, including its cable assets, pushing the total deal value to approximately $111 billion according to Bloomberg. The offer also included a $7 billion regulatory termination fee, up from $5.8 billion, and a commitment to cover the $2.8 billion Netflix would be owed for walking away from its deal.
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Warner Bros. Discovery’s board declared Paramount’s offer superior. Netflix, declining to match, officially stepped aside Thursday.
“We’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive,” Netflix said in a statement.
WBD CEO David Zaslav framed the outcome positively, saying the combined company “can’t wait to get started working together telling the stories that move the world.”
If completed, the deal would unite two of Hollywood’s foundational studios under one roof, combining Paramount’s CBS, MTV, Nickelodeon and Paramount Pictures with Warner Bros.’ DC Studios, CNN, HBO and the HBO Max streaming platform.
Industry analysts say the combined entity could significantly strengthen its position against Netflix in the streaming wars, while cinema operators have raised concerns about potential job losses and a reduction in theatrical releases.
Paramount shares surged 24% on the news. Netflix shares rose 13%, as investors welcomed the company’s decision to exit the bidding war.
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The deal is far from final. California State Attorney General Rob Bonta announced the state is actively investigating the merger. “Paramount/Warner Bros is not a done deal. These two Hollywood titans have not cleared regulatory scrutiny,” Bonta said, adding that his office intends to be “vigorous” in its review.
The U.S. Senate Judiciary Committee has also scheduled a hearing for March 4 to examine the acquisition. Sen. Elizabeth Warren called the deal “an antitrust disaster threatening higher prices and fewer choices for American families.”
EU antitrust approval, however, is expected to be less of a hurdle, with Reuters reporting that any required divestments would likely be minor.
Almost 10 years ago, Disney’s acquisition of 21st Century Fox shrank Hollywood’s Big Six down to five. This deal, if it clears regulators, would bring that number down to four — alongside Universal and Sony.
This is a developing story.
