Netflix has dramatically withdrawn from the prolonged bidding war for Warner Bros. Discovery, positioning Paramount Global, backed by Skydance, as the leading contender to acquire the media conglomerate and its key assets, including CNN.

Netflix confirmed it has “declined to raise its offer for Warner Bros.” after the WBD board determined that Paramount had tabled a “superior” proposal.

“The deal is no longer financially attractive, so we are declining to match the Paramount Skydance bid,” the streamer said, abruptly ending the high-stakes corporate standoff.

This withdrawal reshapes the takeover landscape, placing Paramount on the brink of forming a massive entertainment and news empire that would encompass CNN, HBO, various film studios, and numerous television networks.

Regulatory scrutiny is anticipated to last several months, but without major obstacles, Paramount CEO David Ellison is poised to lead one of the most significant media consolidations in recent history.

WBD CEO David Zaslav adopted a positive stance after Netflix’s exit.

“Once our Board votes to adopt the Paramount merger agreement, it will create tremendous value for our shareholders,” Zaslav said, noting that WBD’s stock more than doubled during the extended bidding process. Paramount’s latest offer is $31 per share.

“We are excited about the potential of a combined Paramount Skydance and Warner Bros. Discovery,” Zaslav added, “and can’t wait to get started working together telling the stories that move the world.”

Investors responded immediately to the news. Netflix shares surged 9 percent in after-hours trading, reflecting relief among shareholders concerned about rising acquisition expenses.

The shift coincided with Netflix co-CEO Ted Sarandos’ visit to the White House, where he was observed departing with a serious expression, sparking political conjecture.

Democratic Senator Elizabeth Warren promptly raised concerns on X about possible influence from the Trump administration.

“What did Trump officials tell the Netflix CEO today at the White House?” Warren wrote on X, adding that it “looks like crony capitalism with the President corrupting the merger process in favor of the billionaire Ellison family.”

Donald Trump had earlier expressed support for Paramount over Netflix, although his statements on the merger have occasionally varied.

Just days prior, Trump called for Netflix to remove board member Susan Rice or “pay the consequences.” In December, he stated that it was “imperative that CNN be sold,” a stance incompatible with Netflix’s plan to separate CNN and other cable properties into a distinct entity rather than divest them completely.

Paramount has persistently sought complete ownership of WBD, including its cable networks, while expressing doubts about their future profitability.

Netflix’s decision followed shortly after WBD’s board officially classified Paramount’s most recent proposal as “superior” to the standing Netflix agreement for Warner Bros. and HBO.

This represented a sharp reversal. Paramount’s efforts started last summer when Ellison presented Zaslav with an unsolicited bid. WBD rejected several early approaches, doubting Paramount’s financial strength.

Following the Netflix agreement, Paramount intensified its strategy with a hostile offer.

Last week, Netflix provided WBD a seven-day period to negotiate with Paramount, previously labeling the competing bid an “ongoing distraction.” WBD requested Paramount’s “best and final” proposal and obtained it.

Ellison’s updated bid, revealed on Tuesday, priced WBD at $31 per share and featured a $7 billion regulatory termination fee, plus adjustments to resolve the board’s primary reservations.

During WBD’s quarterly earnings release on Thursday morning, Zaslav emphasized the advantages gained from the competitive bidding.

The contest, he said, had “led to eight price increases” and “thus far achieved a 63% increase in value versus the first offer received in September, delivering significant value for WBD shareholders throughout the process.”

“Our focus has and always will be maximizing value and certainty while mitigating downside risks,” Zaslav said, “and the board will evaluate any proposal against that standard, with the objective of delivering the best deal for our shareholders.”

Sarandos’ White House meeting was arranged over two weeks in advance, per a Netflix spokesperson, who stressed that the company did not seek a direct session with Trump.

“Netflix is meeting with staff members at the White House,” a White House official told CNN.

Analysts had foreseen possible antitrust challenges from Trump’s Justice Department should the Netflix transaction proceed, potentially leading to extended court battles. Despite outward assurance, Netflix chose not to escalate its bid.

Ellison has made notable efforts to cultivate relations with Trump, including a private White House discussion earlier this month. Soon afterward, Trump claimed in an interview that “I haven’t been involved” in the WBD contest, even though he had previously declared regarding the Netflix deal, “I’ll be involved in that decision, too.”

With Netflix stepping back, Paramount is now best positioned to finalize one of the most impactful media mergers of recent times, subject to regulatory clearance and ultimate board approval.