Netflix Makes All-Cash Bid for Warner Bros

Netflix Shifts Warner Bros. Deal to All-Cash Structure

Netflix and Warner Bros. Discovery announced on Tuesday that they have amended their definitive agreement so that Netflix will acquire Warner Bros.’ studios and streaming business in an all-cash transaction. The revised deal keeps the valuation at $27.75 per WBD share, giving the assets an enterprise value of about $82.7 billion including debt. The new terms replace a prior mix of $23.25 in cash and $4.50 in Netflix stock per share.

Both companies said the all-cash structure simplifies the transaction, provides greater certainty of value for Warner Bros. Discovery stockholders and accelerates the timeline to a shareholder vote. The boards of Netflix and WBD unanimously approved the amended agreement, which will be financed through a combination of cash on hand, available credit facilities and committed financing.

The target business includes Warner Bros.’ film and television studios, its extensive library and the HBO Max streaming service. CNN and other cable networks, including TNT Sports and Discovery+ assets, are to be spun off into a separate publicly traded company called Discovery Global before the Netflix acquisition closes.

Paramount Skydance Rival Bid Raises Competitive Tensions

Netflix’s move comes amid an active takeover battle with Paramount Skydance, which has launched a hostile all-cash $30-per-share bid for the entirety of Warner Bros. Discovery. Paramount has argued that its proposal is superior and has mounted an aggressive media campaign, while also threatening a proxy fight by nominating its own slate of WBD directors.

Paramount has also sued in Delaware Chancery Court to compel Warner Bros. to provide more detail on how it values both the Netflix and Paramount offers, though the court rejected an attempt to expedite the case. Paramount has questioned the value of the proposed Discovery Global cable spinoff, calling those channels effectively worthless, while WBD’s advisers have assigned a range of potential values to Discovery Global shares.

Warner Bros. Discovery has repeatedly rebuffed Paramount’s overtures and continues to back the Netflix transaction. The WBD board has maintained that Netflix’s investment-grade, fixed cash consideration plus a retained stake in Discovery Global offers a superior risk-adjusted outcome compared with Paramount’s bid, which WBD says would leave a combined company with substantially higher debt.

Strategic Rationale and Deal Timeline

Netflix executives framed the revised structure as reinforcing their commitment to the merger. Co-CEO Greg Peters said the transaction is intended to be pro-consumer, pro-innovation, pro-creator and pro-growth, while preserving Netflix’s investment-grade ratings. Co-CEO Ted Sarandos said the combination would expand U.S. production capacity and investment in original programming and deliver broader choice and value to audiences at home and in theaters.

Warner Bros. Discovery CEO David Zaslav described the amended deal as bringing the companies closer to combining two major storytelling businesses, while board chair Samuel A. Di Piazza Jr. emphasized that shifting to all-cash consideration increases certainty for stockholders. WBD has filed a preliminary proxy statement with the SEC and expects to hold a special shareholder meeting, potentially in the spring, once regulatory review progresses.

The separation of Warner Bros. and Discovery Global into two publicly traded companies is expected to be completed within six to nine months, before the Netflix transaction closes. The acquisition itself is projected to close 12 to 18 months from the original merger agreement date, subject to regulatory approvals, completion of the spin-off, WBD shareholder approval and other customary conditions.

Market Reaction and Investor Concerns Around Netflix

The announcement of the all-cash revision lifted Netflix shares modestly on Tuesday morning, with gains reported between 0.7% and more than 1% despite broader weakness in the Nasdaq 100. Warner Bros. Discovery’s shares were little changed to slightly lower, while Paramount’s stock dipped around 1%. However, Netflix shares remain down nearly 15% since the Warner deal was first unveiled in early December.

The revised offer lands on the same day Netflix is due to report quarterly earnings, a release that analysts say may briefly refocus attention on the company’s fundamentals. Some on Wall Street remain concerned about deal-related debt levels and potential pressure on Netflix’s 2026 profit guidance, while others highlight the company’s post‑pandemic free cash flow improvements and ongoing revenue growth as potential supports for the stock.