Netflix and Warner Bros Discovery (WBD) have, as expected, amended their definitive agreement for Netflix’s pending acquisition of Warner Bros to an all-cash transaction. Netflix said that the revised agreement “simplifies the transaction structure, provides greater certainty of value for WBD stockholders, and accelerates the path to a WBD stockholder vote”.

The all-cash transaction continues to be valued at $27.75 (€23.63) per WBD share, unchanged from the prior transaction structure. WBD stockholders will also receive the additional value of shares of Discovery Global following its separation from WBD. The transaction will be financed through a combination of cash on hand, available credit facilities and committed financing.

Netflix said the all-cash transaction serves to provide enhanced certainty around the value WBD stockholders will receive at closing. The revised transaction structure is expected to enable WBD stockholders to vote on the proposed transaction by April 2026. To support this accelerated timeline, WBD has today [January 20th] filed its preliminary proxy statement with the SEC. 

Netflix noted that its strong cash flow generation supports the revised all-cash transaction structure while preserving a healthy balance sheet and flexibility to capitalise on future strategic priorities.

“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,” commented David Zaslav, President and CEO of WBD. “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.”

“The WBD Board continues to support and unanimously recommend our transaction, and we are confident that it will deliver the best outcome for stockholders, consumers, creators and the broader entertainment community,” said Ted Sarandos, co-CEO of Netflix. “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 US production capacity and investment in original programming, driving job creation and long-term industry growth.”  

“Over the last decade, when much of the entertainment industry has contracted, Netflix has grown and invested tremendously in the business of film and television in the US and abroad. This transaction will further fuel that growth and investment,” stated Greg Peters, co-CEO of Netflix. “By amending our agreement today, we are underscoring what we have believed all along: not only does our transaction provide superior stockholder value, it is also fundamentally pro-consumer, pro-innovation, pro-creator and pro-growth. Our revised all-cash agreement demonstrates our commitment to the transaction with Warner Bros. and provides WBD stockholders with an accelerated process and the financial certainty of cash consideration, while maintaining our commitment to a healthy balance sheet and our solid investment grade ratings. We will continue to work closely with WBD to successfully complete the transaction as we remain focused on our mission to entertain the world and, together, define the next century of storytelling.”

“Our amended agreement with Netflix is a testament to the Board’s unrelenting focus on representing and advancing our stockholders’ interests,” added Samuel A. Di Piazza, Jr., Chair of the WBD Board of Directors. “By transitioning to all-cash consideration, we can now deliver the incredible value of our combination with Netflix at even greater levels of certainty, while providing our stockholders the opportunity to participate in management’s strategic plans to realize the value of Discovery Global’s iconic brands and global reach. We look forward to continuing to engage with our investors about the compelling benefits of the transaction as we progress toward our stockholder vote on an accelerated timeline.”

As previously announced, WBD will separate Warner Bros and Discovery Global into two separate publicly traded companies. This separation is expected to be completed in six to nine months, prior to the closing of the proposed Netflix and Warner Bros transaction. 

The amended, all-cash transaction was unanimously approved by the Boards of Directors of both Netflix and WBD. Closing remains subject to completion of the Discovery Global separation, receipt of required regulatory approvals, approval of WBD stockholders and other customary closing conditions. The financing structure is not subject to review by the Committee on Foreign Investment in the US. 

Netflix and WBD have each submitted their Hart-Scott-Rodino (HSR) filings and are engaging with competition authorities, including the US Department of Justice and European Commission.

Reacting to the news, Paolo Pescatore of PP Foresight called it “a significant move, with Netflix clearly keen to expedite matters and wrap up the deal as soon as possible”.

Writing on LinkedIn he added: “The end is nigh for Paramount as Netflix ups the ante, which will likely get the seal of approval from WBD shareholders. It is no one’s interest to have this saga wrangle on for any longer given the regulatory concerns and more time for rivals to react”.

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Categories: Business, Headline, M&A

Tags: netflix, warner bros, WBD