Netflix and Warner Bros. Discovery have amended their previous agreement. The change to the deal is now expected to accelerate the time it takes for shareholders to vote, while providing more surety to shareholders in general.
Key Takeaways
- Netflix has revised its offer for Warner Bros. Discovery into an all‑cash deal, giving shareholders more certainty and speeding up the timeline for a vote.
- The amendment strengthens Netflix’s position against a competing bid from Paramount Skydance.
- Under the revised structure, WBD’s cable networks will still be spun off, leaving Netflix to acquire only the studio and streaming businesses.
The main change to the deal is that Netflix is now offering an all-cash transaction. Although the transaction continues to be valued at the same price ($27.75 per WBD share) as before, the change is designed to eliminate any market-based variability and provide certainty to WBD stockholders around the value they will receive at closing.
Another clear benefit of the amendment is that the revised transaction structure is now expected to allow WBD stockholders to vote on the proposed transaction by April 2026.
Today WBD filed its preliminary proxy statement with the SEC in support of the accelerated timeline.
“Our revised all-cash agreement will enable an expedited timeline to a stockholder vote and provide greater financial certainty at $27.75 per share in cash, plus the value from the planned separation of Discovery Global. Together, Netflix and Warner Bros. will deliver broader choice and greater value to audiences worldwide, enhancing access to world-class television and film both at home and in theaters. The acquisition will also significantly expand U.S. production capacity and investment in original programming, driving job creation and long-term industry growth,” said Ted Sarandos, co-CEO of Netflix.
Another reason the two companies have agreed to this amended deal is Paramount Skydance.
With Paramount aggressively trying to buy Warner Bros. Discovery from under Netflix’s nose, the amendment may make the original Netflix deal more appealing to any shareholders that might have had their head turned by Paramount’s higher price.
Although Paramount is offering a higher per-share price, its offer is for all of Warner Bros. Discovery. In contrast, the Netflix offer does not include the cable networks.
The networks side of the business is still expected to be spun off into a separate company later this year, leaving Netflix able to acquire the remaining studio and streaming side of the business.
“Today’s revised merger agreement brings us even closer to combining two of the greatest storytelling companies in the world and with it even more people enjoying the entertainment they love to watch the most,” said David Zaslav, President and CEO of Warner Bros. Discovery. “By coming together with Netflix, we will combine the stories Warner Bros. has told that have captured the world’s attention for more than a century and ensure audiences continue to enjoy them for generations to come.”
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