Observed Signal · Jan 28, 2026 · M&A · Source: State of Streaming · Impact: 5/5 · Sentiment: Positive
Netflix Switches to All-Cash Offer for WBD
Netflix amended its takeover offer for Warner Bros. Discovery (WBD) on Jan 28, 2026, converting the proposal to an all-cash transaction while keeping the per-share value at $27.75. The move removes the stock component to provide WBD shareholders a firm cash price and is intended to block competing bids from Paramount and Skydance. Under the revised agreement WBD would first spin off its linear networks (including CNN and Discovery Channel) into a new public company named Discovery Global; shareholders would receive stock in that company plus Netflix’s cash for the remaining assets (Warner Bros. Pictures, HBO, DC Studios). The amended merger agreement has been filed with the SEC and the deal faces regulatory review by the U.S. Department of Justice and the European Commission, with closing expected in roughly 12–18 months and a potential shareholder vote as early as April 2026.
Major consolidation between a leading streaming platform (Netflix) and a large content studio/media owner (WBD) materially affects streaming inventory, advertising scale and ownership of premium IP; regulatory review and the spin-off of linear networks could reshape CTV/linear advertising markets and competitive dynamics.
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Key Takeaways & Evidence Grounding
- Netflix amended its offer to Warner Bros. Discovery to an all-cash transaction, keeping the deal price at $27.75 per share.
- The all-cash pivot is positioned to counter competing interest from Paramount and Skydance and to strengthen exclusivity between Netflix and WBD.
- WBD would spin off its linear networks (including CNN and Discovery Channel) into a standalone public company called Discovery Global; shareholders receive stock in the new company plus Netflix's cash for remaining assets.
- The amended merger agreement was filed with the SEC and the transaction is subject to regulatory review by the U.S. Department of Justice and the European Commission.
- The parties expect the transaction to close in about 12–18 months, with a potential shareholder vote as early as April 2026.
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Netflix Eyes $83 Billion Warner Bros. Acquisition
Netflix plans to acquire Warner Bros. (the Warner Bros. Discovery unit including film and TV studios, HBO Max and HBO) for an enterprise value of about $83 billion, with roughly $72 billion in equity value to WBD shareholders. The deal would close in 12 to 18 months, following the planned spin-off of Discovery Global into its own company in Q3 next year, and remains subject to regulatory approvals. Netflix says it would maintain Warner Bros.’ current operations and build on strengths such as theatrical releases. The article notes potential US regulatory scrutiny and discusses how a merger could reshape ad sales and ad tech, including Netflix Ad Suite and WBD’s NEO platform and DemoDirect products that are relevant to the combined backend ad infrastructure.
WBD CEO Highlights Competitive Landscape Amid Netflix Deal Uncertainty
Warner Bros. Discovery (WBD) reported Q4 revenue of $9.5 billion and fiscal 2025 revenue of $37.3 billion (a 5% decline). Ad revenues fell 9%, and content revenues fell 10%; WBD said loss of the NBA reduced growth by roughly 4%. The company reported 131.6 million streaming subscribers across HBO Max and Discovery+, up 3.5 million from the prior quarter, and said Q4 2025 would be the final quarter it would consistently report subscriber counts. During the Q4 earnings call and a shareholder letter, WBD said its merger agreement with Netflix “remains in effect” and the board continues to recommend the Netflix transaction, but an updated all-cash proposal from Paramount Skydance could qualify as a “Company Superior Proposal.” CEO David Zaslav said a highly competitive sale process has raised the company’s value; Netflix’s revised bid is about $72 billion ($27.75 per share) while Paramount Skydance recently raised a cash offer to $31 per share.
Paramount Skydance Acquires Warner Bros. Discovery After Netflix Bows Out
Paramount Skydance, led by David Ellison and financially backed by Larry Ellison, will acquire Warner Bros. Discovery after Warner Bros. Discovery deemed Paramount’s $31-per-share offer a superior proposal. Netflix declined to raise its earlier $82.7 billion all-cash bid and walked away; under the original terms Warner Bros. Discovery must pay Netflix a $2.8 billion termination fee that Paramount agreed to cover. The transaction covers WBD’s studios, HBO and streaming assets, games and entertainment divisions, and linear networks including CNN, TBS, TNT, Discovery, and HGTV. Paramount will assume about $33 billion of WBD debt and the deal is financed in part by a $57.5 billion debt commitment from Bank of America Merrill Lynch, Citi, and Apollo Global Management. Netflix shares rose in after-hours trading and Paramount shares also gained.
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