In a significant development in the media landscape, Netflix has agreed to a revised all-cash takeover deal for Warner Bros Discovery's studio and streaming assets. The US-based streaming giant will now offer $27.75 per share in cash to acquire the business, marking a substantial shift from the original terms announced in December.
Revised Terms and Valuation
The amended agreement comes amid an ongoing takeover battle with rival Paramount Skydance, which launched a hostile bid to derail the initial deal. Previously, Netflix had agreed to pay $23.25 in cash plus $4.50 worth of Netflix stock per share, valuing Warner Bros Discovery at around $82.7 billion. However, with Netflix shares dropping by nearly 15% since the announcement, the company has opted for a simpler, all-cash approach.
Strategic Implications
This revised deal, now valued at approximately $72 billion (£54 billion), includes Warner Bros' extensive library of film and television rights, as well as the HBO Max streaming service. Analysts have noted that the new terms are favourable for Warner Bros Discovery investors, providing greater financial certainty and an accelerated process.
David Zaslav, President and Chief Executive of Warner Bros Discovery, commented on the agreement, stating, "Today's revised merger agreement brings us even closer to combining two of the greatest storytelling companies in the world. 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."
Competitive Landscape
Warner Bros Discovery continues to support the Netflix takeover over a rival bid from Paramount Skydance, which offered to buy the entire company for $30 per share in cash. The agreed deal with Netflix is set to close after Warner Bros Discovery completes a proposed spin-off of its cable channels, including CNN, TBS, and TNT Sports in the UK.
Leadership Perspectives
Greg Peters, Co-Chief Executive of Netflix, emphasised the benefits of the revised agreement, saying, "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."
This move highlights Netflix's aggressive strategy to expand its content library and streaming capabilities, positioning itself more strongly against competitors in the rapidly evolving media industry.
