Netflix deal backed as Warner Bros. Discovery board rejects revised Paramount bid
Warner Bros. Discovery has reaffirmed its support for a proposed $82.7 billion merger with Netflix, unanimously urging shareholders to reject a revised offer from Paramount Skydance after concluding it carried greater risk and lower certainty of value.
Netflix has reinforced its commitment to the proposed acquisition of Warner Bros. Discovery after the target’s board unanimously reiterated its support for the transaction and urged shareholders to reject a revised offer from Paramount Skydance.
The board of Warner Bros. Discovery said it had undertaken a comprehensive and rigorous review of the amended Paramount Skydance proposal, supported by independent financial and legal advisers. It concluded that the revised bid remained inferior to the agreed transaction with Netflix, and again recommended that shareholders do not tender their shares into the competing offer.
Transaction values WBD at $82.7 billion
Under the agreement announced on December five, Netflix will acquire Warner Bros., including its film and television studios, HBO Max and HBO, in a cash and stock deal valuing Warner Bros. Discovery shares at $27.75 each. The transaction implies an enterprise value of approximately $82.7 billion and an equity value of $72.0 billion.
Netflix said the financing structure is not subject to review by the Committee on Foreign Investment in the United States. The group has submitted its Hart Scott Rodino filing and is engaging with competition authorities, including the United States Department of Justice and the European Commission.
Discovery Global separation remains intact
A key feature of the transaction is the preservation of Warner Bros. Discovery’s planned separation of its Global Linear Networks business, Discovery Global. The companies expect that separation to complete in the third quarter of 2026.
Maintaining this structure has been central to the board’s support for the Netflix deal, given the operational and financing complexity involved in executing the spin off alongside a change of control.
Board highlights risks in Paramount proposal
The board’s rejection of the Paramount Skydance bid reflects concerns over financing risk and deal certainty. The revised proposal, announced on December 22, offered a higher headline valuation but relied heavily on debt funding and conditional commitments.
Directors said those features increased the risk of execution failure and raised the prospect of pressure on the combined business’s balance sheet. The board also highlighted the financial consequences of abandoning the Netflix agreement, including a multibillion dollar termination fee and additional financing costs, which would materially reduce the net value available to shareholders.
Netflix stresses strategic logic
Netflix co chief executives Ted Sarandos and Greg Peters said the board’s position confirmed that the merger represents the superior proposal for shareholders, consumers and creators.
They said combining Netflix with Warner Bros. would unite complementary strengths across streaming, film and television production, expand the range of series and films available to audiences and create new opportunities for creative talent across home and theatrical releases.
Regulatory process and shareholder vote ahead
Netflix intends to file a registration statement on Form S-4 with the United States Securities and Exchange Commission, incorporating a proxy statement and prospectus. Warner Bros. Discovery will also file its proxy materials, with definitive documents to be mailed to shareholders ahead of a vote.
A dedicated website has been launched to provide ongoing information and regulatory disclosures relating to the transaction.
Consolidation pressures shape the backdrop
The contest for Warner Bros. Discovery underscores the accelerating consolidation reshaping the global entertainment industry. Scale, intellectual property ownership and balance sheet strength are increasingly critical as companies compete for subscribers and advertising revenue.
While Paramount Skydance may yet seek to engage shareholders directly, Warner Bros. Discovery’s board remains firmly aligned behind Netflix. With the process now moving into the regulatory and proxy phase, the streaming group currently holds the strategic advantage in a deal that could redefine the industry’s competitive landscape.
The Recap
- Netflix welcomed WBD board reaffirmation of the merger agreement.
- Transaction values WBD at approximately $82.7 billion enterprise value.
- Companies expect closing in 12–18 months after agreement date.
