Netflix has officially amended its proposed acquisition of Warner Bros. Discovery’s studios and HBO Max business, converting the deal to an all-cash transaction in a move designed to counter Paramount Skydance’s rival takeover bid.
Netflix and Warner Bros. Discovery announced Tuesday that they revised their definitive agreement so that Netflix will pay $27.75 per share entirely in cash. The transaction maintains an enterprise value of approximately $82.7 billion. The companies said the change “simplifies the transaction structure, provides greater certainty of value for WBD stockholders, and accelerates the path to a WBD stockholder vote.”
Under the revised timeline, WBD shareholders are expected to vote on the deal by April 2026. Warner Bros. Discovery also filed a preliminary proxy statement with the SEC to support the accelerated schedule.
Netflix’s original agreement, announced December 5, was structured as roughly 84% cash, while Paramount Skydance has been offering a 100% cash alternative. One concern with Netflix’s earlier proposal was that a drop in Netflix’s share price could reduce the value received by WBD shareholders a risk eliminated under the new all-cash terms.
Netflix and WBD said the revised structure “provides enhanced certainty around the value WBD stockholders will receive at closing, eliminating market-based variability.”
Another adjustment involves debt allocation. Netflix agreed to reduce the net debt assigned to Discovery Global the cable networks business to be spun off prior to the takeover by $260 million, citing stronger-than-expected 2025 cash flow. WBD said Discovery Global’s net debt is targeted at $17 billion as of June 30, 2026, declining to $16.1 billion by the end of the year.
The transaction remains on track to close 12 to 18 months after the original agreement was signed on December 4, 2025. The Discovery Global spinoff, which will include networks such as CNN, TNT, TBS, HGTV, Food Network, and Discovery+, is expected to be completed within six to nine months.
The amended deal was unanimously approved by the boards of both companies and remains subject to regulatory approvals in the U.S. and Europe, as well as WBD shareholder approval.
Netflix’s move comes as David Ellison’s Paramount Skydance continues to pursue a hostile takeover of Warner Bros. Discovery, offering $30 per share in cash and pushing for a proxy fight. Paramount has argued that its bid would face fewer regulatory hurdles and has challenged how WBD values Discovery Global.
Netflix and WBD confirmed they have submitted Hart-Scott-Rodino filings and are engaging with U.S. and European competition authorities.
Warner Bros. Discovery CEO David Zaslav said: “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.”
Netflix co-CEO Ted Sarandos added: “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 U.S. production capacity and investment in original programming, driving job creation and long-term industry growth.”
Netflix co-CEO Greg Peters said: “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 U.S. and abroad. This transaction will further fuel that growth and investment. 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.”
If completed, Netflix would acquire Warner Bros.’ film and television studios, HBO, HBO Max, and its games division. The breakup fees remain unchanged: WBD would owe Netflix $2.8 billion if it exits the deal, while Netflix would pay $5.8 billion if regulators block the transaction.
Netflix is scheduled to report its fourth-quarter 2025 earnings after market close Tuesday.
Source: Variety