According to a recent announcement, Netflix has officially finalised an all-cash deal to acquire Warner Bros. Discovery’s studios and the HBO Max business, effectively countering a rival takeover effort from Paramount Skydance.
The two companies revealed on Tuesday that they have adjusted their previous agreement regarding Netflix’s proposed acquisition of Warner Bros. assets, now set at US$27.75 per share in cash. This agreement maintains an enterprise value of US$82.7 billion. The revision aims to streamline the transaction, providing greater certainty for WBD shareholders and expediting the shareholder vote schedule.
Previously, the deal was approximately 84% cash, while Paramount Skydance had been offering a 100% cash bid. A key concern with the initial Netflix offer was that if Netflix’s stock fell below a specific threshold, the payout to WBD shareholders would decrease.
Netflix’s new all-cash proposal enhances the certainty for WBD stockholders, eliminating the variability associated with market fluctuations. It also paves the way for a quicker shareholder vote on the deal, which is now expected by April 2026. On Tuesday, WBD filed a preliminary proxy statement with the SEC to support this accelerated voting timeline.
In another adjustment, Netflix has agreed to lessen the net debt that Discovery Global—the cable TV networks entity set to be spun off before Netflix’s acquisition—will carry by US$260 million. This revision reflects a more favourable cash flow projection for Discovery Global in 2025, according to Warner Bros. Discovery’s proxy statement. WBD anticipates that Discovery Global’s net debt will be US$17.0 billion as of June 30, 2026, and will decrease to US$16.1 billion by December 31, 2026.
Both companies stated that the deal is still expected to close within 12-18 months following their initial agreement signing on December 4, 2025. The spin-off of Discovery Global, which will include cable networks like CNN, TNT, TBS, HGTV, and Food Network, as well as TNT Sports and Discovery+, is projected to be finalised in 6 to 9 months.
Netflix’s original bid included US$59 billion in debt financing from three banks: Wells Fargo, BNP, and HSBC. This financing amount has been adjusted to US$34.0 billion as of December 19, which will increase to US$42.2 billion with the new all-cash offer, according to a Netflix SEC filing.
The amended transaction was unanimously endorsed by the boards of both Netflix and WBD but still requires regulatory approvals in the U.S. and Europe, as well as shareholder confirmation from WBD.
The revised offer by Netflix coincides with continued efforts by Paramount Skydance, led by David Ellison, to persuade shareholders that its all-cash offer of US$30 per share is a superior alternative to the Netflix deal. Despite WBD’s board rejecting eight different proposals from Paramount, the latter maintains that its bid would encounter less regulatory scrutiny than a Netflix-WB merger.
Earlier this month, Paramount filed a lawsuit to compel WBD to disclose financial details regarding the Netflix agreement and the valuation of Discovery Global. Paramount also declared its intent to initiate a proxy fight to nominate its own board candidates who would support its bid.
In a proxy filing on January 20, WBD indicated that the board’s analysis of “selected public companies” suggested an approximate equity value range of US$2.41 to US$3.77 per share for Discovery Global. They further noted that an analysis of Discovery Global in the context of a potential acquisition indicated a value range of US$4.63 to US$6.86 per share.
Paramount, noting its US$ 30-per-share offer, argued that its analysis predicts zero value for Discovery Global’s shares, acknowledging only a theoretical M&A value of US$0.50 per share.
In their Tuesday announcement, Netflix and WBD confirmed that they have each filed the necessary Hart-Scott-Rodino documents with the FTC and the Justice Department’s antitrust division, and that they are actively engaging with competition authorities, including the U.S. Department of Justice and the European Commission. As previously disclosed, the transaction is expected to close 12-18 months following the December 5 merger agreement.
David Zaslav, the president and CEO of Warner Bros. Discovery, remarked: “Today’s revised merger agreement brings us even closer to combining two of the greatest storytelling companies in the world and providing even more viewers access to the entertainment they love the most.”
Netflix co-CEO Ted Sarandos also expressed enthusiasm regarding the deal’s progression.
