Netflix is now offering to buy Warner Bros. Discovery’s studio and streaming buisness in an all-cash deal valued at $72 billion, a move designed to perhaps block paramount’s competing bid and win over warner shareholders. It’s a high-stakes gamble reshaping the future of entertainment,and frankly,things are getting messy.
Netflix Ups the Ante in Streaming Wars
The streaming giant’s revised offer aims for a swift resolution to a complex acquisition battle.
- In December, Netflix initially proposed a cash-and-stock deal for Warner Bros. Discovery,valued at $82.7 billion including debt.
- The revised offer is entirely cash, maintaining a value of $27.75 per Warner share, plus the added benefit of shares in a separate Discovery Global company.
- Paramount, backed by Skydance, is pursuing a full acquisition of Warner Bros. Discovery, including networks like CNN, with a $77.9 billion cash offer.
Netflix is betting big on a simplified, all-cash transaction to entice Warner Bros. Discovery shareholders. The revised deal, announced Tuesday, aims to speed up the path to a shareholder vote, potentially arriving as early as April. Warner Bros. Discovery’s current market capitalization is around $36.7 billion, with an enterprise value of $108 billion including debt.
The deadline for Paramount’s offer could be extended. The Wall Street Journal reported last week that Paramount was planning another extension, though the company declined to share further details Tuesday. Paramount has also vowed a proxy fight,announcing plans last week to nominate its own slate of directors before Warner’s next shareholder meeting,the date of which remains unset.
Adding another layer of complexity, Paramount filed a lawsuit in Delaware Chancery Court seeking to compel Warner Bros. to disclose its valuation of both bids. However, a judge on Thursday denied Paramount’s request for expedited proceedings. Warner applauded the court’s decision, calling Paramount’s lawsuit “yet another unserious attempt to distract.” Paramount countered that the ruling wasn’t based on the merits of its allegations and suggested Warner shareholders “should ask why their Board is working so hard to hide this data.”
Antitrust Concerns and Political Intrigue
Nonetheless of the outcome, a sale of Warner Bros. Discovery is highly likely to face notable antitrust scrutiny. Netflix and Warner both anticipate closing the merger 12 to 18 months from December’s initial agreement. Paramount’s hostile bid, however, could complicate that timeline.
The situation is further complex by potential political interference. president Donald Trump has made unprecedented suggestions regarding his personal involvement in whether the deal will proceed.Trade groups across the media and entertainment industry have voiced concerns that further consolidation could lead to job losses and reduced content diversity, particularly impacting filmmaking.
Netflix co-CEO Ted Sarandos addressed these concerns Tuesday, stating that combining with Warner “will deliver broader choice and greater value to audiences worldwide” both at home and in theaters, while “driving job creation and long-term industry growth.”
Netflix’s stock rose just under 1% Tuesday morning, while shares of Warner Bros. Discovery and Paramount-Skydance experienced slight declines.
