On December 17, 2025, Netflix, Inc. announced its support for the Warner Bros. Discovery (WBD) Board of Directors' recommendation urging stockholders to reject an unsolicited offer from Paramount Skydance Corporation (PSKY). This recommendation comes after a thorough review by WBD's independent financial and legal advisors, who assert that the merger agreement with Netflix presents a more favorable and stable option for WBD stockholders.

2. Details of the Merger Agreement

The definitive agreement between Netflix and WBD, announced earlier on December 5, outlines a cash and stock transaction valued at $27.75 per WBD share, culminating in a total enterprise value of approximately $82.7 billion, with an equity value of $72.0 billion. Importantly, this transaction also includes an incremental value for WBD stockholders through the planned separation of WBD's Global Linear Networks business, Discovery Global, expected in Q3 2026.

Statements from Netflix Leadership

Ted Sarandos, co-CEO of Netflix, expressed confidence in the merger, stating, "The Warner Bros. Discovery Board reinforced that Netflix's merger agreement is superior and that our acquisition is in the best interest of stockholders." He emphasized the merger's potential to benefit consumers, creators, and the entertainment industry as a whole. Co-CEO Greg Peters echoed these sentiments, highlighting the anticipated increase in choice and value for audiences and creators globally.

3. Key Advantages of the Netflix-WBD Deal

Netflix's letter to WBD stockholders outlined several compelling reasons why the proposed merger is a superior option compared to the PSKY offer:

Superior Financing Certainty: The merger agreement boasts a clear funding structure with committed debt financing from reputable institutions, ensuring minimal risks and uncertainties compared to PSKY's offer.

Confidence in Regulatory Approvals: The anticipated timeline for closing the transaction is between 12 to 18 months, with Netflix having already submitted its HSR filing and engaged with regulatory authorities. The $5.8 billion reverse termination fee underscores Netflix's confidence in securing necessary approvals.

Flexibility for WBD Stockholders: The Netflix deal allows WBD to continue its operations without significant limitations, facilitating the planned separation of Discovery Global and enabling stockholder value creation.

A Fully Negotiated Agreement: The merger reflects a collaborative effort between the two companies, promising a smooth transition for stakeholders.

4. Enhanced Value for Stockholders

The proposed agreement offers a total equity value of $27.75 per WBD share, comprising $23.25 in cash and $4.50 in Netflix stock, with protective mechanisms for stockholders. The anticipated separation of Discovery Global is expected to create additional value, providing WBD stockholders with enhanced strategic flexibility.

5. A Competitive Landscape

In the context of the global entertainment market, Netflix acknowledges the competitive dynamics at play. Currently, Netflix holds a 8.0% share in U.S. TV viewership, trailing behind major competitors like YouTube and Disney. A combined Netflix-WBD entity would increase this share to 9.2%, still below competitors but enhancing its market position.

6. Commitment to Quality and Innovation

Both Sarandos and Peters reaffirmed Netflix's long-standing commitment to storytelling and creative partnerships. The merger aims to preserve Warner Bros.' legacy while expanding its franchises' reach to audiences in over 190 countries. Netflix's model of releasing films in theaters with traditional windows marks a significant shift in its operational strategy, reflecting its dedication to preserving the theatrical experience.

7. Looking Ahead

As Netflix moves forward with this acquisition, it aims to collaborate closely with WBD, regulatory bodies, and stakeholders to ensure a successful merger. The combination of Netflix's innovative approach with Warner Bros.' rich history and assets is expected to redefine the entertainment landscape, providing new opportunities for creators and consumers alike.

In conclusion, the anticipated merger between Netflix and Warner Bros. Discovery represents a pivotal moment in the entertainment industry, promising enhanced value for stockholders and a more diverse offering for audiences worldwide. The coming months will be critical as both companies navigate regulatory approvals and prepare for integration.

Original press release