Netflix's planned acquisition target, major Hollywood studio Warner Bros., is going to Paramount.
On the 26th (local time), foreign outlets including Reuters and AFP reported that Paramount offered Warner Bros. $31 per share and that Netflix, which had been the preferred bidder, decided to withdraw from the Warner Bros. acquisition battle.
According to the reports, Paramount proposed $30 per share for all of Warner Bros., compensation to shareholders, and the payment of a $2.8 billion breakup fee (about 4 trillion won) that would arise if Netflix withdrew from the deal.
However, when the Warner Bros. board was not satisfied, Paramount raised the price to $31 per share in its final revised proposal submitted by the 23rd and increased the termination fee payable if the transaction failed to obtain regulatory approval from $5.8 billion (about 8.3 trillion won) to $7 billion (about 10 trillion won). As a result, Paramount's purchase price for Warner Bros. surged to $111 billion (about 159.7 trillion won).
Moreover, the proposal included a pledge that, if necessary to meet lending capacity requirements of Paramount's banks, Larry Ellison, founder of Oracle and a longtime friend of U.S. President Donald Trump, would provide additional funds.
Warner Bros. judged Paramount's terms to be superior to the existing deal with Netflix and requested a revised contract. Netflix did not accept this and abandoned its bid to acquire Warner Bros.
Earlier, Netflix in December of last year reached a deal to acquire Warner Bros. for a total of $72 billion (about 105 trillion won), valuing Warner Bros. at $23.25 per share and its HBO Max unit that would merge with Netflix at $27.75 per share. After Paramount emerged as a rival, it ultimately offered to pay $27.75 per share all in cash and valued the company at $82.7 billion (about 122 trillion won) in its final proposal to Warner Bros.
Netflix's acquisition of Warner Bros. was seen as a big deal that would reshape Hollywood, with a global over-the-top platform buying a major Hollywood studio. The deal drew even more attention as the acquisition price climbed to 122 trillion won. But Paramount ultimately gained the upper hand in the bidding war, suggesting a resurgence of mergers and acquisitions among established Hollywood studios.
Paramount last year also proceeded with a merger and acquisition involving Skydance prior to Warner Bros. Thus, in just one year, the merger of two major Hollywood studios, Paramount and Warner Bros., signals the birth of a new global media giant.
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