Netflix officially withdrew its bid for Warner Bros. Discovery, marking a significant move to effectively end a high-stakes bidding war and clears the path for a merger between Paramount Skydance and WBD.

The recent move to back away from its proposal to buy Warner Bros Discovery cleared the way for Paramount Skydance to win a months-long battle for one of Hollywood’s most storied studios.

According to Netflix executives, they declined to match Paramount Skydance’s bid as the deal because the deal is no longer financially attractive” at that price.

In this connection, Netflix co-chief executives Ted Sarandos and Greg Peters said in a statement: “The transition we negotiated would have created shareholders with a clear path to regulatory approval.”

The recent deal between Paramount and Warner Bros could hold serious ramifications for the future of one of the US’s biggest news brands. On Thursday, chief executive David Ellison welcomed the Warner Bros board’s decision in favor of Paramount’s offer. He said in a statement that Warner Bros shareholders “superior value, certainty and speed to closing.”

Regulators approve the Paramount deal, the company will fold Warner Bros. Discovery’s HBO Max streaming customers into its portfolio. Paramount’s traditional networks already include brands such as Nickelodeon, CBS, and Comedy Central. It has been observed that many in Hollywood have viewed the bidding war between Netflix and Paramount as a battle with “no good winner.”

Meanwhile, critics of a deal with Netflix voiced concerns that the storied movie studio would be lost to the Silicon Valley streaming titan, paving the way for diminution of cinema.

This merger with Paramount has touted itself among the last moving studios in Hollywood. Warner Bros had agreed in December to sell its film and streaming divisions including HBO in a deal worth $27.75 per share or approximately $82bn including debt. Paramount this week agreed to pay more for a Warner Bros takeover as the company offered $31bn per share in cash as reported by the BBC.

Nonetheless, the recent withdrawal marks a significant turning point in the future of American media as Netflix has signaled a return to its core strategy by choosing organic growth over the high-risk acquisition of legacy cable assets.