Netflix backs Warner Bros. Discovery board in rejecting Paramount Skydance offer

Netflix welcomes the Warner Bros. Discovery board’s recommendation that shareholders reject an unsolicited offer from Paramount Skydance, reaffirming its backing of a previously announced merger agreement between Netflix and Warner Bros. Discovery.

The Warner Bros. Discovery board urged shareholders to approve its merger with Netflix after reviewing the Paramount Skydance proposal with independent financial and legal advisers. The board said the Netflix deal offers greater certainty and value for shareholders.

The board, in a letter to stockholders, wrote, "We want to reiterate why we believe the agreed-upon transaction with Netflix is the right deal, with the right partner, at the right time."

The companies announced on December 5 that they had reached a definitive agreement under which the streamer would acquire production in a cash-and-stock transaction valued at $27.75 per share. The deal places an enterprise value of about $82.7 billion on Warner Bros. Discovery, including an equity value of $72 billion. The transaction also includes additional value tied to the planned separation of Warner Bros. Discovery’s Global Linear Networks business, Discovery Global, expected in the third quarter of 2026.

Ted Sarandos, Co-CEO, Netflix, said, “The Warner Bros. Discovery Board reinforced that Netflix’s merger agreement is superior and that our acquisition is in the best interest of stockholders. This was a competitive process that delivered the best outcome for consumers, creators, stockholders and the broader entertainment industry. Netflix and Warner Bros. complement each other, and we’re excited to combine our strengths with their theatrical film division, world-class television studio, and the iconic HBO brand, which will continue to focus on prestige television. We’re also fully committed to releasing Warner Bros. films in theaters, with a traditional window, so audiences everywhere can enjoy them on the big screen."

Netflix Co-CEO Greg Peters added, "By acquiring Warner Bros., we’ll be able to offer audiences and creators around the world even more choice, value and opportunity. This transaction is fundamentally pro-consumer, pro-innovation, pro-creator and pro-growth. Together, we will deliver an even broader selection of great series and films that audiences can watch at home and in theaters, while driving long-term value for our stockholders. We’re excited to begin this new chapter and continue to entertain and delight fans around the world."

The Warner Bros. Discovery board reiterated its recommendation in a letter to shareholders dated December 17, urging them to reject what it described as Paramount Skydance’s unsolicited tender offer and to vote in favour of the Netflix merger when the shareholder meeting is held.

Netflix said it expects the transaction to close within 12 to 18 months, subject to regulatory approvals. The company said its financing structure does not require review by the Committee on Foreign Investment in the United States and includes a $5.8 billion reverse termination fee.

Under the agreement, Warner Bros. Discovery will continue to operate independently until the deal closes, including moving forward with the planned separation of Discovery Global. Netflix said this structure provides greater flexibility and lower execution risk for shareholders.

The streamer also plans to continue releasing Warner Bros. films in theatres using traditional release windows following the acquisition.

The proposed merger remains subject to shareholder approval and regulatory review in multiple jurisdictions.