Netflix has formally ended its pursuit of Warner Bros. Discovery (WBD), concluding a high-profile bidding war that has dominated industry speculation for months. The decision follows an internal board review, which confirmed that the company would not increase its offer to compete with rival bids.
The withdrawal occurred on Thursday afternoon, mere hours after Netflix co-CEO Ted Sarandos returned from a series of high-level meetings in Washington DC. Sarandos had been in the capital to discuss the proposed $82.7 billion (£61.3 billion) acquisition with administration officials, navigating the significant regulatory obstacles facing such a large-scale consolidation in the current media landscape.
With Netflix stepping aside, the path is now clear for a merger between Paramount Skydance and WBD. This consolidation is anticipated to fundamentally alter the entertainment sector, uniting several major film studios, cable networks, and streaming services under one corporate umbrella, subject to final shareholder confirmation and regulatory sign-off.
Diplomatic Efforts and Political Context
Sarandos' visit to Washington DC was widely interpreted as a necessary step to gauge the administration's stance on the acquisition. He met with officials to discuss the regulatory pathway for the deal, which had faced intense scrutiny due to its potential impact on media competition and diversity, according to CNBC. The visit coincided with reports of political tension surrounding the corporate governance of Netflix.
Apparently, Netflix CEO Ted Sarandos visited the White House this afternoon and met with staffers, presumably to confirm whether a Netflix/Warner Bros. deal would be likely to get Govt. approval if Netflix chose to raise their bid to counter Paramount's. Shortly after this… https://t.co/dB9qcvl8kc
— Bill Hunt (@BillHuntBits) February 27, 2026
President Donald Trump had previously expressed opposition to the inclusion of former Obama administration official Susan Rice on the Netflix board. While White House officials clarified that the discussions centred on business matters and not a formal meeting with the President, the timing underscored the complex political environment in which the company was seeking to clear regulatory hurdles.
Financial Realities and the Rival Bid
Political considerations were ultimately superseded by financial realities. Shortly after the conclusion of the meetings in Washington, the board of WBD issued a statement designating the Paramount Skydance proposal as a 'Company Superior Proposal.' Paramount Skydance offered $31 per share, which exceeded Netflix's bid of $27.75 per share.
The Paramount proposal included substantial financial protections designed to mitigate the risks associated with the deal. This included a $7 billion regulatory termination fee and commitments to cover the $2.8 billion breakup fee that WBD would have owed to Netflix had the deal been terminated under specific conditions.
Netflix CEO Ted Sarandos attends meetings at the White House to discuss #Netflix's bid for Warner Brothers Discovery.
— Getty Images News (@GettyImagesNews) February 26, 2026
More #GettyNewsVideo 🎥 @andyharnik 👉 https://t.co/Njb8V6U0ZI pic.twitter.com/OjMaWshkgH
These financial guarantees provided the board of WBD with greater certainty, positioning the Paramount Skydance bid as the more attractive option for shareholders.
Strategic Withdrawal
Netflix, which had been granted a four-day window to counter the rival bid, elected to withdraw from the acquisition. In a joint statement, co-CEOs Ted Sarandos and Greg Peters outlined a strategy of fiscal restraint.
'The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,' the statement noted.
The executives reaffirmed that the acquisition was not considered essential, stating that Netflix will prioritise organic growth and its existing $20 billion annual investment in content production. The deal was particularly sensitive because WBD controls a vast portfolio of media assets, including the Warner Bros film studio, the Max streaming service, and cable networks such as CNN, HBO, and the Food Network.
VICTORY!@Netflix just announced they are pulling out of the Warner Bros. merger. This comes after @loomerunleashed led the charge in exposing the Obama infiltration of Netflix, including Netflix CEO Ted Sarandos being an @BarackObama mega donor and Obama chief spy architect and… https://t.co/ZzZaiTbwQk pic.twitter.com/qjcUWl3yMm
— Laura Loomer (@LauraLoomer) February 27, 2026
You're so wrong. Netflix' shares dropped 30% since their merger deal. The CEO was at the White House while the WB board was meeting. Bondi removed the anti trust DOJ lawyer who went after Paramount. Netflix would never get the merger approved. So it dropped out.
— phoenixrisng823🪷🇺🇦🇮🇱🏳️🌈👊🏾 (@phoenixrisng821) February 27, 2026
Market Reaction and Industry Impact
Netflix shares rose by 10 per cent in extended trading on Thursday, as investors responded positively to the prospect of the company avoiding a significant acquisition. Conversely, shares in WBD fell, whilst Paramount stock gained 5 per cent.
The merger is now subject to a final shareholder vote and standard regulatory approvals. The consolidation will fundamentally reshape the entertainment industry, bringing together some of the world's most storied film studios and cable networks under a single corporate umbrella.
