Netflix and Warner Bros. Discovery have released a joint statement, confirming that the two companies have amended the original acquisition deal to an all-cash transaction. With this new transaction structure, Netflix is poised to acquire Warner Bros. Discovery with “greater certainty of value for WBD stockholders.”
In a press release, Netflix and Warner Bros. Discovery announced that the all-cash transaction will continue to be valued at the original rate of $27.75 USD per share. Warner Bros. Discovery stockholders will also receive the additional value of a share of Discovery Global once this arm of the company is separated from Warner Bros. Discovery later this year.
“The WBD Board continues to support and unanimously recommend our transaction, and we are confident that it will deliver the best outcome for stockholders, consumers, creators, and the broader entertainment community,” said Ted Sarandos, co-CEO of Netflix. “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.”
Conditionally, the deal is in place as long as Netflix’s shares don’t fall below $97.91. On December 8th last year, Netflix’s share price dropped below the threshold, allowing Paramount to launch its own aggressive bid. In an attempt to sway the deal, Paramount offered $30 per share, higher than Netflix’s bid. However, Warner Bros. Discovery has denied Paramount multiple times.
Once the acquisition is accepted, Netflix will acquire the studio and streaming rights of well-known IPs such as Game of Thrones, Harry Potter, Batman, The Sopranos, and The Big Bang Theory. These will join Netflix’s exclusive portfolio alongside Stranger Things, Squid Game, Wednesday, and more.
As mentioned, Discovery Global will be split from Warner Bros. Discovery, leaving networks like Discovery, CNN, and TNT to be purchased by another entity “in six to nine months,” the press release notes. The deal will be finalized “prior to the closing of the proposed Netflix and Warner Bros. transaction.”
The deal is now ultimately contingent on the separation of Discovery Global, approval from regulatory bodies, approval of Warner Bros. Discovery stockholders and customary conditions.
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