Warner Bros Rejects Paramount’s US$108 Billion Takeover Bid and Endorses Netflix Merger

Warner Bros has formally rejected a hostile US$108 billion takeover bid from Paramount, describing the offer as inferior and financially risky, while throwing its support behind a proposed merger with Netflix that it says offers greater stability and long term value for shareholders.

In a statement released this week, Warner Bros said Paramount’s approach failed to adequately reflect the company’s strategic direction, balance sheet realities, and future growth prospects. The board argued that the bid carried significant execution and financing risks, particularly at a time when the global media industry is under pressure from declining traditional television revenues and intensifying competition in streaming.

Paramount’s proposal, which was not solicited by Warner Bros, was framed as an all cash hostile takeover valued at US$108 billion. However, Warner Bros executives said the offer relied on aggressive assumptions about cost savings and future earnings that they believe are unrealistic in the current market environment. The company also raised concerns about potential regulatory hurdles and the impact such a deal could have on operational focus during a critical period of transformation.

Instead, Warner Bros said it views its planned merger with Netflix as a more compelling and sustainable option. The proposed deal is being positioned as a strategic combination rather than a takeover, designed to strengthen content creation, global distribution, and streaming scale. Executives said the Netflix partnership offers clearer industrial logic, stronger cash flow visibility, and a better cultural fit between the two companies.

According to people familiar with the discussions, Warner Bros believes a Netflix merger would allow it to accelerate its shift toward a streaming first model while reducing duplication in technology, marketing, and international expansion. The company also highlighted Netflix’s established global subscriber base and data driven approach as key advantages in a rapidly evolving media landscape.

Shareholder value was a central theme in Warner Bros’ rejection of the Paramount bid. The board said the Netflix deal provides a more balanced risk profile and avoids the heavy debt burden that could arise from a leveraged buyout. It also argued that a friendly merger offers greater certainty for employees, creative partners, and investors compared with a prolonged hostile takeover battle.

Paramount has not yet issued a detailed public response to Warner Bros’ decision, though people close to the matter say the company is assessing its next steps. Analysts note that the rejection is a significant setback for Paramount’s ambitions to consolidate major Hollywood studios and compete more effectively with streaming giants.

The broader industry context has weighed heavily on the decision. Legacy media companies are facing shrinking advertising revenues, rising content costs, and pressure from investors to streamline operations. In that environment, Warner Bros has signaled it prefers a partner that strengthens its streaming position rather than one that adds complexity and financial strain.

Market reaction to the announcement was mixed, with some investors welcoming the clarity and others questioning whether a Netflix merger will face its own regulatory scrutiny. Still, many analysts said Warner Bros’ stance reflects a growing preference among media companies for strategic alliances over high risk mega acquisitions.

For now, Warner Bros has drawn a clear line. By rejecting Paramount’s bid and backing the Netflix deal, the company is betting that scale, stability, and alignment in streaming will matter more than headline grabbing takeover valuations as Hollywood enters its next phase.