Netflix has officially upgraded its proposed acquisition of Warner Bros. Discovery’s studios and HBO Max business to an all-cash transaction, a strategic move designed to strengthen its position against
Paramount Skydance’s competing takeover bid.
Netflix and Warner Bros. Discovery (WBD) announced on Tuesday that they have amended their definitive agreement, under which Netflix will now acquire the assets at $27.75 per share entirely in cash. The revised deal maintains an enterprise value of $82.7 billion. According to the companies, the updated structure “simplifies the transaction structure, provides greater certainty of value for WBD stockholders, and accelerates the path to a WBD stockholder vote.”
Why Netflix Shifted to an All-Cash Offer
The original agreement, announced on December 5, was structured as approximately 84% cash, compared to Paramount Skydance’s fully cash-based proposal. One concern surrounding Netflix’s earlier bid was that fluctuations in Netflix’s stock price could reduce the payout to WBD shareholders if shares fell below a certain threshold.
By moving to a 100% cash deal, Netflix and WBD said the transaction now “provides enhanced certainty around the value WBD stockholders will receive at closing, eliminating market-based variability.” The updated terms also pave the way for a faster shareholder decision, with WBD investors now expected to vote on the transaction by April 2026. On Tuesday, WBD filed a preliminary proxy statement with the U.S. Securities and Exchange Commission “to support this accelerated timeline.”
The amendment also reflects improved financial performance at Discovery Global, the cable networks business that will be spun off before Netflix completes its acquisition of Warner Bros. studios and HBO Max.
Discovery Global Spin-Off and Debt Changes
As part of the revised agreement, Netflix has agreed to reduce the specified net debt assigned to Discovery Global by $260 million. This adjustment comes “in light of the stronger than previously anticipated 2025 cash flow performance of Discovery Global,” according to Warner Bros. Discovery’s proxy filing.
WBD said the target net debt for Discovery Global now stands at $17.0 billion as of June 30, 2026, declining further to $16.1 billion by December 31, 2026. The spun-off entity will include cable networks such as CNN, TNT, TBS, HGTV, Food Network, TNT Sports, and Discovery+, and is expected to be completed within six to nine months.
The overall transaction remains on track to close within 12 to 18 months following the signing of the original agreement on December 4, 2025.
Netflix’s financing structure has also evolved. Its original bid included $59 billion in debt financing from Wells Fargo, BNP, and HSBC, which was reduced to $34.0 billion by December 19. Under the new all-cash offer, debt financing will increase to $42.2 billion, according to a Netflix SEC filing.
The amended transaction has been unanimously approved by the boards of both Netflix and WBD and remains subject to regulatory approvals in the U.S. and Europe, as well as approval from WBD shareholders.
