Paramount-Warner merger: How the year-long Hollywood bidding war unfolded

What began as Warner Bros Discovery's plan to split its studios from its declining television networks turned into a bidding war involving Paramount, Netflix and other buyers

Paramount Skydance completed its acquisition of Warner Bros Discovery (WBD) on Tuesday, bringing Warner Bros, HBO and CNN together with Paramount Pictures, CBS and Paramount+. The deal values WBD at about $81 billion in equity terms and roughly $110 billion including debt, creating a new media company called Skydance Corporation (SKYD).

 

The deal ends a year-long contest that began with WBD planning to split itself in two, drew in Paramount and Netflix, and ended with Paramount raising its offer until Netflix decided not to match it. 

From Time Warner to Warner Bros Discovery

AT&T bought Time Warner in 2018. Three years later, it agreed to spin WarnerMedia into a combination with Discovery, creating WBD in 2022. The new company brought together Warner Bros and HBO with Discovery’s television networks, but also inherited the structural problem facing traditional media: declining linear television and the high cost of streaming.

 

Paramount was facing much the same pressure. CBS and Viacom, which had split in 2005, reunited in 2019 as ViacomCBS and were renamed Paramount Global in 2022 as the company pushed Paramount+.

 

Skydance Media, founded by David Ellison in 2010, then became central to Paramount. The production company had worked with Paramount on films including Mission: Impossible and Top Gun: Maverick. Skydance Media and Paramount Global completed their merger in August 2025, creating Paramount Skydance Corporation, with David Ellison as chairman and chief executive.

Why Warner opened the door to buyers

In June 2025, WBD announced plans to split into two companies. One would contain Warner Bros’ studios, DC Studios, HBO, HBO Max and its film and television libraries. The other, Global Networks, would house CNN, TNT Sports, Discovery and other traditional television and digital assets. The aim was to separate businesses with different growth prospects.

 

That proposed break-up also made WBD easier to shop. The most valuable prize was its studios and streaming business, including Warner Bros, HBO and HBO Max. Netflix wanted those assets. Paramount wanted the entire company, including CNN, Discovery and its traditional television networks.

 

Paramount made the first serious approach. Its initial proposal in September 2025 implied about $19 per WBD share. WBD rejected it. Paramount returned with offers of about $22 and later $23.50 per share. By November, other bidders had entered, including Netflix.

Why Netflix wanted Warner

Netflix’s wanted Warner's studios, HBO and streaming business, including Warner Bros’ film and television studios, HBO and HBO Max. Netflix had the global streaming platform. What it lacked was a Hollywood studio and one of the industry's deepest libraries of premium content. Warner could supply both.

 

In November, four parties submitted preliminary bids. Paramount offered to buy the entire company for an implied $25.50 per share. Netflix proposed buying Streaming & Studios after the Global Networks separation, with an initial bid implying $27 per share.

 

On December 5, 2025, Netflix and WBD announced a definitive agreement. Netflix would acquire Warner Bros’ film and television studios, HBO and HBO Max after the Global Networks separation. The deal was valued at $27.75 per WBD share, or about $72 billion in equity value and $82.7 billion in enterprise value, which is the value of the company including debt.

 

Three days later, Paramount launched a $30-per-share all-cash tender offer directly to WBD shareholders. A tender offer allows a buyer to approach shareholders rather than relying on the target board to recommend the transaction.

 

WBD initially rejected Paramount’s proposal and backed Netflix, citing greater certainty around that transaction. Paramount’s offer involved a more complex financing structure and substantial debt.

 

Paramount kept raising the stakes. In February 2026, it offered $31 per WBD share in cash. It also offered to pay Netflix’s $2.8 billion termination fee and proposed a $7 billion regulatory termination fee.

 

On February 26, Netflix said it would not raise its offer, saying that matching Paramount’s price would make the deal financially unattractive.

 

Here the bidding war was over.

Paramount wins

On February 27, Paramount Skydance and WBD signed a definitive merger agreement at $31 per WBD share in cash. The deal valued WBD’s equity at about $80.9 billion at signing and had an enterprise value of about $110 billion. Paramount also agreed to pay Netflix’s $2.8 billion termination fee.

 

The transaction then faced regulatory challenges. The US Department of Justice closed its antitrust investigation in June, finding that the deal was not likely to harm competition in streaming, traditional scheduled television channels or theatrical film production and distribution.

 

But 12 US states led by California sued in July, arguing that the merger would reduce competition. The Writers Guild of America also challenged the transaction.

 

In September, Paramount settled with the states. It agreed to invest at least $1.5 billion in domestic film production over five years, establish a $47.5 million fund for affected workers, maintain minimum theatrical film output and create a News Editorial Independence Board covering CBS News and CNN.

 

A federal judge approved the settlement on September 30.

What Skydance now owns

The transaction closed on October 6. WBD shareholders received $31.01666668 per share, WBD shares stopped trading on Nasdaq and the combined company began trading on the New York Stock Exchange under the ticker SKYD.

 

Skydance now brings together Warner Bros and Paramount Pictures, HBO and Paramount+, HBO Max and Pluto TV, CNN and CBS News, CBS and Warner Bros Television, TNT Sports and CBS Sports, Discovery’s global networks and the companies’ film and television libraries. Its franchises include Harry Potter, DC, Game of Thrones, Mission: Impossible, Top Gun, Star Trek and SpongeBob SquarePants.