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On Tuesday, Netflix and Warner Bros. Discovery said they amended their merger agreement so that Netflix will now pay $27.75 per share entirely in cash. The transaction still values the deal at $82.7 billion, but removes any uncertainty tied to Netflix’s stock price.
The companies said the revised structure “simplifies the transaction, provides greater certainty of value for WBD stockholders, and accelerates the path to a shareholder vote.”
Why Netflix Changed the Deal
Netflix’s original offer, announced in December, was about 84% cash and 16% stock. That structure left WBD shareholders exposed if Netflix’s share price dropped below a set threshold — which it later did. By switching to all cash, Netflix matches the core appeal of the competing Paramount Skydance proposal, which has been pressing shareholders with a $30-per-share all-cash hostile bid.
With the amendment, WBD shareholders are now expected to vote on the Netflix deal as early as April 2026. Warner Bros. Discovery has already filed a preliminary proxy statement with the SEC to support the faster timeline.
Discovery Global Spin-Off
Before Netflix takes control of Warner Bros.’ studios and HBO Max, WBD plans to spin off its cable-focused business, Discovery Global. This unit will house brands such as CNN, TNT, TBS, HGTV, Food Network, TNT Sports and Discovery+.
Netflix also agreed to reduce Discovery Global’s net debt by $260 million, citing stronger-than-expected 2025 cash flow. The target net debt is now set at $17 billion by June 30, 2026, falling to $16.1 billion by year-end.
The spin-off is expected to be completed within six to nine months, while the overall Netflix-WBD transaction is still projected to close 12 to 18 months after the original December 2025 signing.
Paramount Fights Back
Despite the WBD board rejecting eight separate Paramount offers, Paramount Skydance continues to challenge the Netflix deal. Earlier this month, Paramount filed a lawsuit seeking more disclosure around Netflix’s valuation of Discovery Global and formally launched a proxy fight to replace WBD board members.
Paramount has argued that its bid would face less regulatory resistance than a Netflix-Warner combination. Netflix and WBD, however, said they have already submitted filings under the Hart-Scott-Rodino Act and are engaging with U.S. and European competition authorities.
What Netflix Is Buying
Under the agreement, Netflix would acquire:
• Warner Bros. film and television studios
• HBO and HBO Max
• Warner Bros.’ games division
Netflix would not take over the cable networks, which remain with Discovery Global.
Executive Reactions
Warner Bros. Discovery CEO David Zaslav said the revised deal brings the companies “even closer to combining two of the greatest storytelling companies in the world.”
Netflix co-CEO Ted Sarandos called the all-cash structure a win for shareholders, adding that the merger will expand production, boost jobs and increase access to premium films and TV worldwide.
His fellow co-CEO Greg Peters said the deal underscores Netflix’s long-term belief that the merger is “pro-consumer, pro-creator and pro-growth.”
What Happens Next
The deal still requires:
• Regulatory approval in the U.S. and Europe
• Approval from Warner Bros. Discovery shareholders
Breakup fees remain unchanged. If WBD walks away, it owes Netflix $2.8 billion. If regulators block the deal, Netflix must pay WBD $5.8 billion.
For now, Netflix’s all-cash move has clearly shifted momentum — setting up a high-stakes showdown between two rival visions for the future of Hollywood.
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