How Netflix outpaced Paramount and Comcast in the race for Warner Bros

Netflix’s move to acquire Warner Bros. Discovery in a $82.7 billion cash-and-stock deal, including debt, has been raising eyebrows in the entertainment industry, from the streamer's competitors like Paramount and even the White House, reports suggest.

The online streaming platform beat paramount and Comcast in what Bloomberg's entertainment reporter Lucas Shaw described as a "three-horse race", which initially many expected to go Paramount's way.

Speaking on Bloomberg’s Big Take podcast, Shaw said that Netflix has never signed as big a deal, "They have been averse to the regulatory headaches that come with deals like this." He added that Netflix Co-CEO Greg Peters had only weeks earlier voiced scepticism about large media mergers

Read more: Netflix shares slip as antitrust worries cloud its $83 billion Warner Bros bid

However, Netflix seems to have been drawn to Warner Bros.’ extensive film and TV library, from HBO series to classic studio titles, the one type of asset the company has previously said it would consider buying. The streamer is not acquiring cable networks such as CNN or TNT.

Shaw said the deal "puts one of the oldest and most powerful studios in the hands of a company that was until recently seen — and maybe still is seen — as sort of a Silicon Valley interloper."

The move is being seen as an attempt to boost the staggering growth of the company over the past few years.

The competition for the acquisition began with Paramount Skydance's three unsolicited offers, which at one point appeared to be the frontrunner. They have even challenged the process.

Read more: Netflix's $5.8 billion breakup fee for Warner among largest ever

Bloomberg said the company has accused Warner Bros. of favouring Netflix and may pursue legal action. Letters sent by its advisers allege procedural unfairness, and people close to David Ellison expect litigation, though the form it may take is unclear.

Bloomberg reported that Warner Bros. Discovery shareholders are set to receive $27.75 a share, roughly double the level before takeover interest surfaced. Netflix believes the acquisition will help reduce churn, strengthen its pricing power and support expansion into adjacent businesses including theatrical releases, consumer products and gaming, Shaw said.