Netflix announced Thursday it is stepping away from its merger agreement with Warner Bros. Discovery after the company’s board determined that a competing bid from Paramount Skydance delivers greater value to shareholders.

Under a deal unveiled in December, Netflix had agreed to acquire Warner Bros. Discovery’s film and television studios, HBO and HBO Max, DC Entertainment, and other intellectual property assets in a transaction valued at approximately $82.7 billion.

After Warner’s board labeled Paramount Skydance’s revised proposal “superior,” Netflix was granted a four-day window to submit a higher offer. In a news release, co-CEOs Ted Sarandos and Greg Peters said the company would not match the new terms.

“The transaction we negotiated would have created shareholder value with a clear path to regulatory approval,” the executives said. “However, we’ve always been disciplined, and at the price required to match Paramount Skydance’s latest offer, the deal is no longer financially attractive.”

Paramount Skydance this week raised its offer to $31 per share, valuing Warner Bros. Discovery at roughly $111 billion. The proposal includes a $7 billion regulatory termination fee if the transaction fails to close due to government action and a commitment to cover the $2.8 billion breakup fee owed to Netflix.

The bid is backed by Oracle founder Larry Ellison, who has pledged additional financial support if necessary to satisfy lending requirements. Ellison, a longtime ally of President Donald Trump, is the father of Paramount Skydance CEO David Ellison.

David Ellison said in a statement that the company is “pleased” that the Warner board unanimously affirmed the value of its offer, citing certainty and speed to closing.

The Netflix-Warner agreement had drawn scrutiny from the Department of Justice, which opened an investigation into whether the merger could lessen competition in violation of federal antitrust law. A group of 11 Republican state attorneys general also urged regulators to examine the proposal, warning of potential market concentration in the entertainment sector.

With Netflix declining to revise its bid, Paramount Skydance is now positioned to move forward with its acquisition effort, pending regulatory review.