Netflix Did Strike $82.7 Billion Warner Bros. Discovery Deal But Paramount's Letter Could Complicate It

Netflix Inc (NASDAQ:NFLX) is betting regulators — not rival bidders — will decide the fate of its Warner Bros. Discovery (NASDAQ:WBD) deal, even as Paramount Skydance (NYSE:PSKY) argues the sale process was tilted and could complicate the transaction.

• Netflix stock is feeling bearish pressure. Why is NFLX stock falling?

Deal Snapshot

Netflix said it entered a definitive agreement to acquire Warner Bros., including its film and television studios and the HBO and HBO Max businesses, in a cash-and-stock deal valued at about $82.7 billion in enterprise value.

Netflix said the transaction values Warner Bros. Discovery at $27.75 per share, implying an equity value of approximately $ 72 billion.

Also Read: Netflix Slides Toward A Death Cross — Is The Streamer Losing Signal?

Auction Context

The agreement follows a high-stakes Hollywood bidding fight in which Netflix emerged with exclusive negotiating rights after a turbulent final round of offers that included Paramount Skydance.

Trade reports have differed on the winning price during the auction, with Deadline putting the bid at $28 per share and The Wrap reporting Netflix reached a $30-per-share target.

Although both described the talks as focused on Warner Bros.' storied film and TV studios and the HBO Max streaming service, along with marquee properties such as Harry Potter and the DC Universe.

Paramount Skydance Objections

Paramount Skydance has alleged that Warner Bros. Discovery's auction was biased and potentially predetermined in Netflix's favor.

According to a CNBC report, Paramount Skydance sent a letter to Warner Bros. Discovery CEO David Zaslav, proposing the formation of an independent special committee to oversee the process.

The letter raised concerns about potential management conflicts tied to incentives and warned that even the appearance of favoritism could harm shareholder value and increase risk to any deal.

Approvals & Timeline

Netflix said both boards unanimously approved the agreement, which remains subject to regulatory approvals, Warner Bros. Discovery shareholder approval, and other customary closing conditions.

The deal is expected to close after Warner Bros. Discovery completes the planned separation of its Global Networks business into a new publicly traded company, Discovery Global, which is now expected to occur in the third quarter of 2026.

Consideration & Synergies

Under the terms, Warner Bros. Discovery shareholders will receive $23.25 in cash and $4.501 in Netflix common stock per share at closing, with the stock portion subject to a collar tied to Netflix's 15-day VWAP measured three trading days before closing.

Netflix said it expects to maintain Warner Bros.' current operations, including theatrical film releases, and projects at least $2 billion to $3 billion in annual cost savings by year three, with the deal expected to be accretive to GAAP earnings per share by year two.

Price Action: Netflix shares were down 4.37% at $98.71, and Warner Bros. Discovery shares were up 2.12% at $25.06 during premarket trading on Thursday, according to Benzinga Pro data.

Read Next:

•  ITT To Acquire SPX FLOW In $4.8 Billion deal

Image created using artificial intelligence via Gemini