Hollywood is in the center of a mega-deal battle: Paramount makes a counter offer and challenges Netflix’s plans for Warner Bros
9 December 17:30
The biggest corporate confrontation in decades is unfolding in Hollywood: Paramount Skydance has announced its readiness to acquire Warner Bros. Discovery for $108.4 billion, outpacing the offer of Netflix, which only a few days ago announced its intention to take over the company for $82.7 billion. Reuters writes about it, "Komersant Ukrainian" reports.
Paramount’s offer has dramatically changed the course of negotiations and cast doubt on a scenario that looked almost certain.
Paramount bets on cash and easier regulatory scrutiny
Paramount is offering $30 per share, which means more than $18 billion in cash for Warner Bros. shareholders. According to the corporation, this deal structure can be easier to pass through US and international regulators.
Paramount CEO David Ellison said the merger would create a “stronger Hollywood” and benefit the creative industry, movie theaters, and consumers. If the deal is approved, the merged company will become the largest player in the content market, surpassing even Disney.
What are the risks of such a deal?
Paramount’s margins are much lower than Netflix’s, and the company will have to take on additional debt to finalize the deal, which creates long-term financial risks. The merger will also have a greater concentration of studio production, which may trigger additional scrutiny from antitrust authorities.
The market reaction was mixed:
- paramount shares rose by 6.8%,
- Warner Bros. Discovery – by 5.5%,
- Netflix fell by 4%, indicating investors’ doubts about the chances of streaming to maintain control over the deal.
What is known about the deal
Just three days ago, Netflix announced its intention to acquire Warner Bros Discovery, including HBO and HBO Max, for $82.7 billion. According to this model, Warner Bros. shareholders were to receive $23.25 in cash and $4.50 in Netflix shares for each of their shares.
The deal was expected to be finalized by the third quarter of 2026. Now, after the emergence of an alternative offer, the process may be significantly delayed and turn into a months-long competition that will determine the future shape of the global entertainment industry.
At the same time, US President Donald Trump has stated that he will have an impact on the decision on whether one of the largest mergers in the global entertainment industry – the acquisition of Warner Bros Discovery studios and streaming business by Netflix – can take place .
Ahead is the decision of the board of directors of Warner Bros. Discovery’s board of directors, which will have to evaluate both proposals. If Paramount continues to increase pressure, the market could see a new wave of asset valuations, and Hollywood could see its biggest transformation since the transition to the streaming era.
