Netflix–WBD Deal and Paramount’s Counteroffer: What Investors Should Know
On December 5, 2025, Netflix and Warner Bros. Discovery (WBD) announced that they had entered into a definitive agreement for Netflix to acquire the Warner Bros. film and TV studio, HBO, HBO Max, and associated streaming assets. The cash-and-stock deal values WBD at $27.75 per share, representing an equity value of roughly $72 billion (or $82.7 billion enterprise value) according to Netflix’s press release. Only after this agreement was signed did Paramount re-enter the picture. On December 8, it launched a far larger hostile offer aimed directly at WBD shareholders.
In this article, we break down what is actually happening and what retail investors need to know as the situation unfolds.
Netflix’s Acquisition Agreement with Warner Bros. Discovery
Netflix’s offer valued WBD at $27.75 per share, or roughly 72 billion dollars in equity value. WBD shareholders would receive $23.25 in cash and $4.50 in Netflix stock for each share. Before the merger closes, WBD plans to spin off its global cable networks division, Discovery Global, by the third quarter of 2026. Netflix would therefore acquire the studio and streaming assets, while the linear networks such as CNN, TNT and Discovery Channel would become a separate company.
Netflix described the deal as a unique chance to combine Warner Bros.’ historic library and franchises with Netflix’s global distribution system. The company specifically highlighted the value of integrating HBO’s premium programming with Netflix’s scale and technology. Netflix also expects the transaction to generate meaningful efficiencies and become earnings-accretive by its second year after closing. Both boards unanimously approved the agreement, and closing is expected within twelve to eighteen months, subject to regulatory reviews and WBD shareholder approval.
It is important to note that WBD had already been exploring strategic alternatives, including a potential separation of its studio and networks businesses. Netflix’s offer emerged from this process and narrowly beat an earlier proposal submitted by Paramount. With the Netflix agreement signed, the competitive process appeared to be over until Paramount abruptly returned with a dramatically larger bid.
Paramount’s All-Cash Hostile Offer
On December 8, Paramount, recently rebranded under Skydance’s control, announced an unsolicited all-cash tender offer for WBD at $30 per share. The offer values WBD at approximately 108.4 billion dollars, far higher than Netflix’s valuation and representing around 18 billion dollars more cash for shareholders.
Paramount’s approach differs fundamentally from Netflix’s. Instead of requiring a spin-off, Paramount seeks to acquire the entire company, including the cable networks. Paramount argues that WBD shareholders should not be left with a smaller and highly leveraged networks business after the studio assets are sold. The company also emphasized that the offer is fully financed, supported by equity commitments from the Ellison family and RedBird Capital, and backed by 54 billion dollars in committed debt financing from major banks. Because the funding is locked in, the offer is not subject to a financing contingency.
Paramount framed its proposal as simpler and more likely to clear regulatory hurdles. The company argues that combining HBO Max with Paramount+ would create a stronger competitor to Netflix rather than reinforcing Netflix’s dominant position. Paramount also highlighted the difficulty Netflix might face in securing approval for a deal that would give it more than 40% of global streaming subscribers.
The tender offer remains open through January 8, 2026 unless extended. Paramount launched it after making multiple private proposals to WBD that did not result in negotiations, and is now appealing directly to shareholders.
WBD’s Position and the Decisions Ahead
Warner Bros. Discovery’s board acknowledged Paramount’s bid and confirmed it will review the offer in line with its fiduciary duties. At the same time, the board has not withdrawn its recommendation in favor of the Netflix deal and has advised shareholders to take no action until its review is complete. Breakup fees also play a role. If WBD terminates the Netflix agreement in favor of another offer, it would owe Netflix roughly 2.8 billion dollars. Netflix, in turn, could owe WBD about 5.8 billion dollars if regulatory issues prevent the merger from closing.
Investors now face a rare situation in which two industry-defining deals are competing for the same company. Netflix offers strategic alignment, global scale and a signed agreement. Paramount offers a higher price, immediate liquidity and a simpler corporate structure. The outcome will determine not only WBD’s future, but also the balance of power across the global streaming industry.
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Market Reaction and Antitrust Concerns
The stock market has been tracking this bidding battle closely, and share prices moved sharply with each announcement. WBD shares initially reacted positively to the Netflix agreement, rising about 3% to approximately $25.33 on December 5. The stock still traded below the $27.75 offer price, suggesting investors were already pricing in potential execution or regulatory risks. Netflix’s shares slipped only slightly, down about 0.2%, as investors weighed the long-term strategic benefits of adding Warner Bros. to its ecosystem. Paramount Global, the legacy company before the Skydance merger, fell more than 6% that same day, a sign that the market viewed its loss in the bidding process unfavorably and feared it might attempt a costly response.
The landscape shifted again when Paramount revealed its hostile bid on December 8. WBD shares rose another 5.3% to around $26.70 as investors began to factor in the possibility of a $30 all-cash payout. Netflix’s shares fell roughly 4% on the news, reflecting concerns that the company might be drawn into a bidding war or face a more uncertain regulatory path. Paramount’s own stock climbed about 7%, suggesting some investors believe its Ellison-backed proposal could create a stronger company or that the deep financing commitments reduce the risk of over-leveraging Paramount’s balance sheet. As with most high-profile media mergers, continued volatility is likely, especially if either bidder adjusts its offer or if regulators begin issuing early signals about approval prospects.
Regulatory scrutiny is likely to be one of the decisive factors in this bidding battle. A Netflix–WBD merger would be one of the largest media transactions ever, combining the world’s biggest streaming platform with a major studio and HBO Max. Critics have already warned that such consolidation could reduce competition, weaken theatrical markets and increase Netflix’s leverage over creative talent. Lawmakers, unions and industry groups have expressed concern that a combined Netflix–WBD operation could limit consumer choice or lead to higher prices.
Paramount has been actively using these concerns to argue that its own bid faces a much smoother path. The company says its offer provides “a much shorter and more certain path to completion” and has emphasized that it has already filed for Hart-Scott-Rodino approval in the United States and initiated pre-notification discussions with the European Commission, signaling faster regulatory engagement. Paramount claims it is prepared to work closely with regulators to complete the review process efficiently.
In contrast, Paramount argues that Netflix’s deal is “in for a long and bumpy ride.” According to Paramount’s analysis, Netflix is the No. 1 global streaming service by subscribers, and HBO Max is No. 4; combining them would create an estimated 43% global streaming market share, more than double the size of the next competitor. Paramount also points to the vertical integration issue: Netflix absorbing Warner Bros.’ studios could give it increased leverage over theatrical exhibitors and creative talent. Paramount also notes Netflix’s market capitalization, which is larger than the combined value of many competing media companies, as evidence of Netflix’s dominant position.
Paramount’s regulatory team, which includes former merger-enforcement officials from the European Commission and the U.K.’s Competition and Markets Authority, argues that Netflix faces even tougher scrutiny in Europe. Their analysis claims Netflix held 51% of total European OTT subscription revenue in 2024, far ahead of Disney at 10%. They characterize HBO Max as one of Netflix’s only viable competitors in Europe and argue that Netflix’s attempt to acquire WBD’s streaming and studio assets is a direct effort to eliminate that competition. They also say Netflix will need to satisfy Europe’s new Digital Services Act and Digital Markets Act, frameworks created specifically to limit dominance by large digital platforms.
Paramount’s own proposal is not without regulatory questions, as it would combine two Hollywood studios and two streaming services. Even so, Paramount argues that regulators will view its merger as creating a stronger competitor rather than reinforcing the market leader. Whether regulators accept that framing remains uncertain. Both deals could undergo lengthy review, and either transaction may not close until late 2026 or 2027 depending on the depth of global antitrust investigations.
Conclusion
This bidding battle shows how valuable premium content has become. Investors should watch three things closely: WBD’s upcoming board decision, any revised offers from Netflix or Paramount, and early signals from regulators or political leaders. These will drive near-term stock moves.
For WBD shareholders, the situation presents a potential premium payout, but the real question is whether either deal will actually close. Some may choose to take profits as the stock trades near the offer levels, while others may hold out for the full $30. Netflix investors need to judge whether the long-term strategic benefits of acquiring WBD outweigh the execution and regulatory risks. Paramount investors are essentially betting on David Ellison’s plan to build a stronger industry challenger; success could push Paramount into the top tier of entertainment companies, but failure would force the company to rethink its growth strategy.
Overall, retail investors should consider their risk tolerance and timeline. Either transaction could unlock value, but both also carry integration and debt risks. The market’s early reaction has been cautiously optimistic, with WBD trading toward the offer prices, suggesting investors expect a premium outcome. Whether the winner is Netflix or Paramount, the streaming landscape will shift, and the successful bidder will gain a larger content library and subscriber base. Execution will determine whether those gains translate into future earnings growth. As one analyst noted, the battle may be prolonged — and it may still contain a few Hollywood-style twists before it ends.
This article is for informational purposes only and is not investment advice or a solicitation to buy or sell securities. The content is based on publicly available information and reflects the author’s opinions as of the publication date, which may change without notice. All investments carry inherent risks, including the potential loss of principal, and past performance is not indicative of future results. Readers should conduct their own research or consult a financial advisor before making investment decisions. BBAE holds no position in the securities mentioned, nor are they compensated by the companies mentioned.
