Hollywood is set to witness one of its most anticipated, or dreaded, mergers as Paramount and Warner Bros. Discovery (WBD) have officially announced their deal. The agreement, formally unveiled on Friday, will see David Ellison's Paramount acquire WBD for a staggering $31 per share in cash, valuing the deal at an impressive $110 billion. This announcement follows Netflix's withdrawal from the bidding just a day prior, as Paramount's superior offer proved too high for the streaming giant to contend with. Netflix's decision to exit the race marks a stunning turn of events in what was already considered an industry-shaking maneuver. The streaming company had a four-day window to counter, but the increased financial commitment rendered the deal "no longer financially attractive" compared to the $83 billion previously offered by Ted Sarandos and his team.

This successful conclusion represents the culmination of Paramount's months-long hostile takeover attempt. Not only does it prevent potential rival pairings, but it also significantly expands Paramount's intellectual property catalog, coming only half a year after its substantial merger with Ellison's Skydance. The merger is projected to be finalized in the third quarter of 2026, pending regulatory approvals.

The prospect of a Netflix acquisition of WBD had sparked considerable anxiety within Hollywood, particularly concerning its potential impact on the theatrical business. Netflix has historically been hesitant to grant many of its major films extensive theatrical windows, reserving longer runs for only a select few titles such as Guillermo del Toro's Frankenstein and Rian Johnson's Wake Up Dead Man. While Sarandos had pledged to maintain WBD's traditional theatrical releases, fears persisted regarding the future of the moviegoing experience. In contrast, Paramount has committed to releasing 30 movies annually, split equally between both studios, with a guaranteed 45-day theatrical window for each film.

In an official statement, David Ellison emphasized the profound legacy of both Warner Bros. and Paramount, highlighting the immense possibilities that their union presents for both theatrical distribution and streaming platforms. "From the very beginning, our pursuit of Warner Bros. Discovery has been guided by a clear purpose: to honor the legacy of two iconic companies while accelerating our vision of building a next-generation media and entertainment company. By bringing together these world-class studios, our complementary streaming platforms, and the extraordinary talent behind them, we will create even greater value for audiences, partners, and shareholders — and we couldn’t be more excited for what’s ahead,” Ellison stated.

Paramount is acquiring Warner Bros. Discovery at a pivotal moment. WBD achieved significant box office success last year, emerging as a clear winner with blockbuster releases like Sinners, A Minecraft Movie, and Superman. The company anticipates continued success in 2026 with an upcoming slate that includes The Bride! next month, Mortal Kombat II in May, Supergirl in June, and Dune: Part Three in December.

However, before fully integrating its new assets, Paramount must navigate a complex landscape of legal and regulatory challenges to secure approval for the deal. A notable provision of the new agreement includes a ticking fee of $0.25 per share, payable quarterly after September 30, until the regulatory processes are successfully completed. This means the cost of the deal will progressively increase until it receives approval, which is not guaranteed. Senator Corey Booker has already called for Ellison to testify before Congress, and California Attorney General Rob Bonta has vowed a "vigorous" review of the transaction.

Furthermore, President Donald Trump has cast a long shadow over the battle for Warner Bros. Discovery. He previously demanded that Netflix fire board member Susan Rice, a former UN ambassador, and in December, he insisted that "it's imperative that CNN be sold," despite WBD's initial intentions to spin off its news media division. The Wall Street Journal had earlier reported that Ellison provided "assurances" to the president regarding potential changes to CNN should his takeover succeed. Overall, the merger is expected to usher in sweeping changes across both companies, including the projection of thousands of layoffs. Industry observers will be closely monitoring further developments regarding the fallout of the Paramount and Warner Bros. Discovery deal.