Netflix, Inc. (NasdaqGS:NFLX) entered into a definitive agreement to acquire Warner Bros. Discovery, Inc. (NasdaqGS:WBD) for $71.5 billion on December 4, 2025. Under the terms of the agreement, each WBD shareholder will receive $23.25 in cash and $4.5 in shares of Netflix common stock for each share of WBD. The transaction values Warner Bros. Discovery at $27.75 per share, implying a total equity value of approximately $72.0 billion and an enterprise value of approximately $82.7 billion. The stock component is subject to a collar under which WBD shareholders will receive Netflix stock valued at $4.50 per share of Netflix stock price (measured three trading days prior to closing) falls between $97.91 and $119.67. If the VWAP is below $97.91, WBD shareholders will receive 0.0460 Netflix shares for each WBD share. If the VWAP is above $119.67, WBD shareholders will receive 0.0376 Netflix shares for each WBD share. Wells Fargo, BNP and HSBC provided $59 billion of senior unsecured bridge term loan for financing the acquisition. In case of termination of transaction, Netflix, Inc. will pay a termination fee of $5.8 billion and WBD will pay a termination fee of $2.8 billion. In a related transaction WBD announced plans to separate its Streaming & Studios and Global Networks divisions into two separate publicly traded companies. As of December 19, 2025 Netflix entered into a Senior Unsecured Revolving Credit Agreement with the lenders party thereto and Wells Fargo Bank, National Association, as the administrative agent. The Revolving Credit Agreement provides for a $5,000 million unsecured revolving credit facility. Netflix may use the proceeds of borrowings under the Revolving Credit Agreement (i) to pay the cash portion of the purchase price required under the Agreement and Plan of Merger. Netflix entered into a Senior Unsecured Delayed Draw Term Loan Credit Agreement with the lenders party thereto and Wells Fargo Bank, National Association, as the administrative agent. The DDTL Credit Agreement provides for a two-year $10000 million unsecured delayed draw term loan credit facility and a three-year $10000 million unsecured delayed draw term loan credit facility Netflix may use the proceeds of borrowings under the DDTL Credit Agreement to pay the cash portion of the purchase price required under the Merger Agreement.

The transaction is subject to approval by regulatory board / committee, approval of the transaction by WBD shareholders, consummation of separation and distribution of WBD?s Global Linear Networks business and certain other assets, the authorization for listing on NASDAQ upon official notice of issuance of the shares of Netflix common stock issuable to the holders of shares of WBD common stock and the effectiveness of a registration statement on Form S-4 and the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The deal has been unanimously approved by the Board of Directors of Netflix, Inc. and Warner Bros. Discovery. The transaction is expected to close in 12-18 months. Netflix, Inc. expects to realize at least $2-3 billion of cost savings per year by the third year and expects the transaction to be accretive to GAAP earnings per share by year two. As on January 7, 2026, Warner Bros. Discovery, Inc Board of Directors has unanimously determined that Paramount Skydance?s tender offer, as amended on December 22, 2025, is not in the best interests of WBD and its shareholders and does not meet the criteria of a ?Superior Proposal? under the terms of WBD?s merger agreement with Netflix, Inc. The Board unanimously reiterates its recommendation in support of the Netflix combination and recommends that WBD shareholders reject PSKY?s offer.

Moelis & Company LLC and Wells Fargo Securities, LLC acted as financial advisor for Netflix, Inc. Kenton King, Sonia Nijjar, Lauren Kramer, Steven Sunshine, Joseph Rancour, Bradley Pierson, Ken Kumayama, Michelle Gasaway, Leila Sayegh, Nathan Giesselman, Page Griffin and Ryne Posey of Skadden, Arps, Slate, Meagher & Flom LLP acted as legal advisor for Netflix, Inc. Allen & Company LLC, Evercore Group L.L.C and J.P. Morgan Securities LLC acted as financial advisor for Warner Bros. Discovery, Inc. Allen & Company LLC and J.P. Morgan Securities LLC also acted as fairness opinion provider to Warner Bros. Discovery, Inc. Andrew J. Nussbaum, Karessa L. Cain, Deborah L. Paul, William Savitt and Ryan A. McLeod of Wachtell, Lipton, Rosen & Katz LLP and Erik J. Andren, Katherine D. Taylor, Gordon S. Moodie and Jonathan E. Levitsky of Debevoise & Plimpton LLP acted as legal advisor for Warner Bros. Discovery, Inc.