COMPETITIVE · USA
Warner Bros. Discovery sale process: Paramount/Skydance pays Netflix breakup fee after WBD terminates merger agreement
Change
Paramount Skydance paid Netflix a $2.8B termination (breakup) fee after Warner Bros. Discovery terminated its merger agreement with Netflix, per a Friday SEC filing.
Why it matters
A Friday SEC filing states WBD notified Netflix that it terminated the merger agreement, triggering a $2.8B termination fee that Paramount/Skydance paid to Netflix. This converts a contested bidding situation into a closed contractual outcome: Netflix is out and has received cash consideration tied to the termination. For deal stakeholders, the executed fee changes near-term cash positions and removes uncertainty about whether Netflix would match terms before its stated deadline next Wednesday. The outcome also clarifies which counterparty WBD is proceeding with, affecting integration planning, counterparties’ contract consents, and transaction-related timelines tied to the winning bid.
Implications
- • Netflix receives $2.8B cash; termination provisions have been executed.
- • WBD-Netflix merger agreement is terminated, removing that deal path.
- • Paramount/Skydance bears a $2.8B transaction cost tied to the win.
- • Deal counterparties face reduced bid uncertainty ahead of the prior match deadline.
Who is affected
- • Netflix (management, shareholders)
- • Paramount/Skydance (deal sponsors, financing providers)
- • Warner Bros. Discovery (board, executives, shareholders)
- • WBD deal counterparties (lenders, major commercial partners)
Source
Topics
Business & Markets Mergers & Acquisitions Finance & Banking Capital Markets