Hollywood loves a sequel, and some of the biggest entertainment giants just delivered. Following months of offers and counteroffers, Paramount has successfully usurped Netflix’s bid for Warner Bros. Discovery and its vast library of content. This edition of Your M&A and Corporate Partner examines how Paramount orchestrated the new deal and what lessons business owners can apply when considering their own transactions.
As we covered in the inaugural Your M&A and Corporate Partner newsletter, Warner Bros. Discovery (WBD) has been at the center of a flurry of business news after announcing in December 2025 that the company was set to be acquired by Netflix following a review of a series of bids from potential buyers. The plan was for Netflix to absorb the streaming and studio portions of the company after WBD spun off its cable network channels into its own company, “Discovery Global.” The original deal was a combined cash and stock offer valued at $82.7 billion, expected to close in late 2026 following regulatory review.
Paramount, which had submitted six proposals to WBD during the bidding process, immediately began making moves to derail the deal. Just days after Netflix announced the acquisition, Paramount attempted a hostile takeover with an all-cash offer of $108.4 billion, reportedly for WBD in its entirety, with no cable network spin-off needed. WBD’s Board publicly recommended that shareholders should reject the new offer and said that Paramount’s offer “[remained] inferior to the Netflix merger.”
Undeterred, Paramount responded by filing a lawsuit in Delaware Chancery Court to try to force WBD to disclose information about the terms of Netflix’s bid so WBD shareholders could evaluate both deals. Paramount’s attempt to obtain the information was rejected by the court. Netflix countered Paramount’s efforts by amending its offer to also be all cash, still incorporating the spin-off of the cable network channels.
On February 10th, Paramount announced its final enhanced offer for WBD, increasing the overall cash offer per share, offering to pay the $2.8 billion termination fee with Netflix, eliminating a potential $1.5 billion fee in additional debt financing costs, and offering more appealing terms. WBD formally reopened talks with Paramount following the updated offer. Soon after, Netflix withdrew its offer to acquire WBD when it declined to raise its offer to match Paramount’s. The total value of the new deal between Paramount and WBD is $110 billion.
A victorious Paramount recently announced its hard-fought acquisition of WBD and presented its plan for the merged companies to shareholders, including live sports, streaming, news, linear shows, gaming, and theatrical movie releases.
Does the drama end here? Netflix has exited stage left, but there are more than a few critics waiting to make a move. Paramount and WBD now face regulatory hurdles at the state, federal, and global levels as antitrust concerns, political maneuvering, and foreign-backed funding all face scrutiny. With closing expected in Q3 2026, it is likely this story will continue dominating the headlines as the deal winds its way through the legal review process.
What Can Businesses Learn From This?
Business can sometimes feel like a contest where “winning” means closing the deal at any expense. In truth, the “winner” is often the party that gets the best value for its dollar. Netflix, while losing out on a potential acquisition, set a price limit and did not raise its bid beyond its valuation for WBD.
In a statement posted on its website on February 26th, Netflix said the WBD “transaction was always a ‘nice to have’ at the right price, not a ‘must have’ at any price.” The media giant stated that it will continue growing and investing in its entertainment services. Netflix knew what it wanted from the WBD deal, evaluated its worth to them, and walked away when the terms no longer served its interests in a strategic business move.
Have questions about how to make sure your deals best serve your business interests? Contact M&A and Corporate lead Connie Phelps at cphelps@berenzweiglaw.com.