Looking to allay some considerations, Netflix stated the deal would give subscribers extra reveals and movies, increase its US manufacturing and long-term spending on authentic content material and create extra jobs and alternatives for artistic expertise.
The firm argued in deal talks {that a} mixture of its streaming service with HBO Max would profit shoppers by decreasing the price of a bundled providing.
The firm has advised Warner Bros Discovery it could hold releasing the studio’s movies in cinemas in a bid to ease fears that its deal would eradicate one other studio and main supply of theatrical movies, in keeping with media experiences.
Cash-and-stock deal
Under the deal, every Warner Bros Discovery shareholder will obtain $US23.25 in money and about $US4.50 in Netflix inventory per share, valuing Warner at $US27.75 a share, or about $US72 billion in fairness and $US82.7 billion, together with debt.
The deal represents a premium of 121.3 per cent to Warner Bros Discovery’s closing value on September 10, earlier than preliminary experiences of a attainable buyout emerged.
The deal is anticipated to shut after Warner Bros Discovery spins off its international networks unit, Discovery Global, right into a separate listed firm, a transfer now set for completion within the third quarter of 2026.
Netflix has supplied Warner Bros Discovery a $US5.8 billion breakup price, whereas Warner Bros Discovery would pay Netflix $US2.8 billion if the deal collapses.
Netflix stated it expects to generate a minimum of $US2 billion to $US3 billion in annual value financial savings by the third yr, after the deal closes.
Netflix development worries
Analysts have stated Netflix is pushed by a need to lock up long-term rights to hit reveals and movies and rely much less on outdoors studios because it expands into gaming and appears for brand new avenues of development after the success of its password-sharing crackdown.
Its shares are up simply 16 per cent this yr, after surging greater than 80 per cent in 2024, as buyers fear its breakneck development could possibly be slowing, particularly after it stopped disclosing subscriber figures earlier this yr.
The firm has leaned on its ad-supported tier to drive development, however that’s not anticipated to turn out to be a serious income engine till subsequent yr, whereas analysts say its push into video video games has stumbled amid technique shifts and govt turnover.
Buying Warner Bros would additionally deepen its gaming guess, as WBD is among the few leisure firms to notch huge successes within the sector, together with its Harry Potter title Hogwarts Legacy, which has generated greater than $US1 billion in income.
Reuters
