Netflix has officially revised its agreement to acquire Warner Bros. Discovery's studios and HBO Max business, transitioning to an all-cash transaction of $27.75 per share, maintaining an $82.7 billion enterprise value. This strategic move is primarily aimed at counteracting Paramount Skydance's aggressive rival takeover campaign, which has been offering 100% cash. The initial Netflix deal, announced in December, was approximately 84% cash, which presented a vulnerability where the payout to WBD shareholders could decrease if Netflix’s stock value declined.

The updated all-cash offer provides enhanced certainty for WBD stockholders, eliminating market-based variability and simplifying the transaction structure. This revision also accelerates the path to a WBD stockholder vote, with shareholders expected to cast their ballots on the proposed transaction by April 2026. To facilitate this expedited timeline, WBD has already filed a preliminary proxy statement with the SEC. Furthermore, Netflix has agreed to reduce the specified net debt to be borne by Discovery Global—the cable TV networks entity slated for spin-off before Netflix’s takeover—by $260 million. This adjustment, driven by stronger-than-anticipated 2025 cash flow performance from Discovery Global, sets the target net debt for Discovery Global at $17.0 billion by June 30, 2026, decreasing to $16.1 billion by December 31, 2026. Netflix's debt financing for the deal has consequently increased from $34.0 billion to $42.2 billion.

Both Netflix and WBD's boards have unanimously approved this amended, all-cash transaction. The merger and acquisition deal remains contingent upon regulatory approvals in the U.S. and Europe, as well as final approval from WBD stockholders. The deal is still projected to close 12-18 months following the original agreement's signing on December 5. The spin-off of Discovery Global, which encompasses prominent cable networks such as CNN, TNT, TBS, HGTV, Food Network, TNT Sports, and Discovery+, is anticipated to be finalized within six to nine months. Under Netflix’s deal, the streaming giant will acquire the Warner Bros. film and television studios, HBO and HBO Max, and its games division.

Paramount Skydance, led by David Ellison and backed by Oracle co-founder Larry Ellison, RedBird Capital Partners, and sovereign wealth funds from Saudi Arabia, Qatar, and Abu Dhabi, has persistently advocated for its $30 per share all-cash hostile bid. Despite the WBD board rejecting eight different offers from Paramount, the rival bidder asserts its proposal would face fewer regulatory hurdles than a Netflix-WB combination. Paramount also initiated a lawsuit to compel WBD to disclose financial specifics of the Netflix deal, including how Discovery Global was valued, and has declared plans for a proxy fight to nominate its own WBD board candidates.

In its January 20 proxy filing, WBD estimated Discovery Global's implied equity value at $2.41 to $3.77 per share through a sum-of-the-parts analysis, and $4.63 to $6.86 per share based on a potential future acquisition analysis. Paramount, conversely, claimed its analysis indicated zero value for Discovery Global shares, though it conceded a theoretical M&A value of $0.50 per share. Both Netflix and WBD have submitted their Hart-Scott-Rodino filings and are actively engaging with antitrust authorities, including the U.S. Department of Justice and the European Commission. The financing structure of Netflix’s all-cash deal is not subject to review by CFIUS, a point Paramount has also claimed for its own offer by stating foreign funds would forgo governance rights.

The prospect of Netflix acquiring Warner Bros. has generated significant industry concerns, including potential job losses, movie theater closures, and the consolidation of immense power within Hollywood. To alleviate these fears and win over opponents, Netflix co-CEO Ted Sarandos has committed to maintaining a 45-day theatrical window for Warner Bros. movies, countering earlier speculation of direct-to-streaming releases or significantly shorter 10-day windows. Netflix has already been experimenting with theatrical releases, such as the final episode of "Stranger Things" which reportedly earned over $25 million at the box office, and limited two-week theatrical runs for films like "Train Dreams" and "A House of Dynamite" prior to their streaming debuts. "The Immortal Man," a Peaky Blinders spin-off, is also slated for this model.

WBD President and CEO David Zaslav expressed enthusiasm, stating the revised agreement brings them closer to combining "two of the greatest storytelling companies." Ted Sarandos highlighted the expedited timeline, financial certainty, and the potential for broader choice, expanded U.S. production capacity, job creation, and long-term industry growth. Greg Peters, Netflix's other co-CEO, emphasized that the transaction would further fuel Netflix's growth and investment, providing superior stockholder value while being fundamentally pro-consumer, pro-innovation, pro-creator, and pro-growth. Breakup fees remain unchanged: WBD would pay Netflix $2.8 billion if it withdraws, while Netflix would pay WBD $5.8 billion if regulators block the deal.