Netflix Moves to Cash Offer for Warner Bros.
In a significant shift, Netflix has transitioned its agreement with Warner Bros. Discovery (WBD) to an all-cash deal, replacing the previous stock component.
Under the new terms, Warner Bros. is valued at $27.75 per share, removing the earlier $4.50 stock element that contributed to Netflix’s competitive edge over rival Paramount. Notably, the Discovery Global assets remain excluded from the transaction.
Both Netflix and WBD emphasized that this agreement “provides enhanced certainty” for WBD shareholders by “eliminating market-based variability.” The deal, maintaining its total valuation of $82.7 billion, is expected to streamline the process for a shareholder vote as soon as April 2026.
This development increases pressure on Paramount, which has been advocating for the cancellation of the Netflix agreement in order to pursue its own offer of $30 per share, factoring in the Discovery segment that Netflix is not acquiring.
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The ongoing separation of Warner Bros. and Discovery Global into distinct entities is projected to be finalized in six to nine months, prior to the conclusion of the Netflix deal.
The all-cash transaction has received unanimous approval from the Boards of Directors of both Netflix and WBD. However, it remains contingent upon the successful completion of the Discovery Global spin-off, regulatory approvals, WBD stockholder consent, and other closing conditions. Former President Donald Trump has expressed both support and skepticism regarding the deal, which could influence its finalization.
WBD has reported a valuation range for the Discovery Global spin-off, estimating a low of $1.33 per share and a high of $3.24. If Discovery Global plays a role in a “potential future transaction,” its valuation could rise to as much as $6.86, according to a recent proxy filing.
“Today’s revised merger agreement brings us even closer to combining two of the greatest storytelling companies in the world, allowing more people to enjoy the entertainment they love,” said David Zaslav, President and CEO of WBD.
“By coming together with Netflix, we will merge Warner Bros.’ century-long legacy of storytelling with a commitment to ensure that these stories continue to resonate with audiences for generations,” Zaslav added.
Ted Sarandos, co-CEO of Netflix, stated, “The WBD Board continues to support and unanimously recommend our transaction, confident it will yield positive outcomes for stockholders, consumers, creators, and the broader entertainment community.”
Sarandos further explained, “Our revised all-cash agreement will enable an expedited timeline for a stockholder vote and enhance financial certainty at $27.75 per share, complemented by the separated Discovery Global value. This partnership aims to deliver a wider selection and greater value to audiences globally, while also boosting U.S. production capacity and original programming investment, thereby fostering job creation and long-term growth in the industry.”
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