“Netflix” withdraws from the “Warner Brothers” deal after a huge offer from “Paramount”
Netflix announced on Friday that it was withdrawing from negotiations to acquire Warner Bros. Discovery Group, paving the way for its rival Paramountto complete a deal worth $111 billion to annex the historic Hollywood Studios.
Netflix’s decision came after the intensity of bidding escalated, as Paramount raised its offer to $31 per share.
Netflix attributed its withdrawal to the financial infeasibility of the deal at this new price, stressing its adherence to its financial discipline despite its confidence in the regulatory feasibility of the deal it had concluded. In December for $82.7 billion (including debt).
These developments come in the wake of an intense campaign launched by Paramount, led by David Ellison, to restore the deal, which included improved offers that included personal guarantees from the billionaire. Larry Ellison (President of Oracle) for more than $40 billion in shares.
The offer also included financial guarantees, as Paramount pledged to pay $2.8 billion to Netflix as compensation for terminating the agreement, and an additional $7 billion to Warner Brothers if the deal fails to obtain regulatory approvals.
It is noteworthy that this battle reflects a shift in the film production sector, as it faces traditional production companies such as Paramount and Warner Bros. struggles with declining viewers and advertisers, based on its vast subscriber base of more than 325 million users globally.
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