In a classic corporate defense maneuver, Netflix is restructuring its $83 billion acquisition of Warner Bros Discovery into an all-cash offer. The change is aimed squarely at defeating a hostile takeover attempt by Paramount Skydance. By offering immediate liquidity, Netflix hopes to solidify the support of WBD shareholders and close the deal before Paramount can gain a foothold.
Paramount’s competing bid is financially larger, sitting at $108.4 billion, but it is burdened by debt and complex financing structures. WBD’s board has already advised against it, calling it “inadequate.” However, Paramount remains a threat, leveraging the backing of billionaire Larry Ellison to pressure WBD’s leadership and board of directors.
The original Netflix deal, agreed upon in December, was a hybrid of cash and stock. It also involved spinning off WBD’s linear networks, such as CNN and Discovery, into a separate entity. The new all-cash proposal simplifies the math for investors, removing the volatility of stock prices from the equation and offering a clean exit for the streaming and studio assets.
If the deal succeeds, Netflix will absorb the Warner Bros film library and HBO’s television catalog. This would bring franchises like Harry Potter and Batman under the same roof as Stranger Things. However, the sheer scale of this merger has provoked anxiety among industry peers and politicians, who fear it will reduce competition and innovation.
Market analysts have reacted positively to the news, with WBD stock rising 1.6%. The move demonstrates Netflix’s financial muscle and its determination to expand its library, even in the face of stiff competition and regulatory scrutiny. The coming weeks will be critical as shareholders decide between Netflix’s cash and Paramount’s promises.