Netflix is updating the terms of its December agreement to acquire Warner Bros Discovery, moving to an all-cash offer to ensure the $83 billion deal crosses the finish line. The revision aims to accelerate the acquisition of WBD’s studio and streaming businesses and protect the agreement from a persistent hostile bid by Paramount Skydance.
When Warner Bros put itself up for sale in October, it attracted interest from major players like Comcast and Paramount. Netflix ultimately won the bid in December, but Paramount has refused to walk away. Backed by the Ellison family, Paramount has launched a $108.4 billion counter-offer and is attempting to replace the WBD board to force acceptance.
The original Netflix deal was complex, involving cash, stock, and equity in a new network company. The new all-cash structure is designed to be faster and more appealing to shareholders, mitigating the threat from Paramount. WBD has consistently rejected Paramount’s offer, citing the high debt levels required to fund it.
The merger is facing significant pushback from outside the boardroom. US politicians have criticized the deal, warning that it consolidates too much power in the hands of one streaming service. The fear is that a Netflix-WBD giant would stifle competition and dominate the entertainment landscape.
Despite the external pressure, the internal logic of the deal remains strong for both parties. WBD shares rose 1.6% on the news, suggesting that the market views the all-cash pivot as a smart move to lock in value and end the uncertainty surrounding the company’s future.