TLDR
- Netflix shifted to an all-cash $82.7B bid for Warner Bros Discovery.
- Warner’s board unanimously supports Netflix’s $27.75 per share offer.
- The move aims to speed approval and counter Paramount’s hostile bid.
- Regulators and trade groups warn of antitrust and industry risks.
- Investors focus on earnings and deal financing clarity.
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Netflix, Inc. (NasdaqGS: NFLX) traded at $88.18 during market hours, up 0.20%, as investors digested news of a major shift in its proposed acquisition of Warner Bros Discovery.
Netflix, Inc., NFLX
The streaming leader has moved to an all-cash offer valued at $82.7 billion, replacing its earlier cash-and-stock proposal in a bid to secure shareholder approval and fend off a rival challenge from Paramount-Skydance.
The revised deal values Warner Bros shares at $27.75 each and is backed unanimously by Warner’s board. Netflix said the all-cash structure offers greater financial certainty and accelerates the path to a shareholder vote, expected as early as April.
BREAKING: $NFLX Netflix upgrades Warner Bros ( $WBD) $83B bid to all-cash.
Netflix just announced that it was amending its $83 billion takeover deal for Warner Bros. to an all-cash deal, thus removing $4.50 in Netflix stock that had been a part of its initial winning offer.… pic.twitter.com/nvi7GEvYSe
— TacticzHazel (@TacticzH) January 20, 2026
Why Netflix Changed Course
Netflix altered the structure after its own shares fell nearly 15% following the original deal announcement in December. By removing equity from the transaction, Netflix aims to reduce volatility concerns for Warner shareholders while stabilizing sentiment around its own stock.
The revised offer also helps Warner reduce Discovery Global’s debt by about $260 million. Warner shareholders will still receive shares of Discovery Global, which is set to become a separate public company following a previously announced corporate separation.
Warner CEO David Zaslav said the updated agreement brings the companies closer to combining “two of the greatest storytelling companies in the world,” reinforcing management’s preference for Netflix over competing bids.
Paramount’s Hostile Challenge
Paramount-Skydance continues to press Warner shareholders with an all-cash $30 per share offer, arguing its bid carries higher headline value. That proposal values the full company, including networks such as CNN and Discovery, at an enterprise value of roughly $108 billion including debt.
Warner’s board has pushed back, citing balance sheet strength and leverage. It argues a merger with Netflix would keep debt below four times profits, compared with about seven times profits under a Paramount combination. Paramount has gone directly to shareholders, launched a tender offer, and threatened a proxy fight by nominating its own slate of directors.
Legal tensions have followed. Paramount filed suit in Delaware seeking more disclosure around deal valuations, though a judge declined to expedite the case. Warner called the lawsuit a distraction, while Paramount said shareholders deserve transparency.
Regulatory and Political Overhang
Any Warner Bros Discovery sale is expected to draw intense antitrust scrutiny. Media trade groups have warned that further consolidation could lead to job losses and reduced content diversity. Regulators in the U.S. and abroad are likely to examine the competitive impact on streaming, film distribution, and television markets.
Politics could also play a role. President Donald Trump has made unusual comments about potential personal involvement in major merger decisions, adding uncertainty to the approval timeline. Netflix and Warner maintain they expect the transaction to close within 12 to 18 months of December’s agreement, though Paramount’s actions could complicate that schedule.
Earnings add Another Layer
The deal update comes just as Netflix prepares to report quarterly earnings after the closing bell. Analysts expect revenue of $11.97 billion, up 17% year over year, with earnings per share rising to $0.55 from $0.43.
Investors are likely to press management on deal financing, regulatory strategy, and integration planning during the earnings call. Options markets suggest heightened volatility around the report, reflecting uncertainty tied to both financial results and merger developments.
Stock Performance Context
Netflix shares have lagged the broader market in the near term. Year to date, NFLX is down 5.99%, compared with a 0.52% gain for the S&P 500. One-year returns stand at 2.72%, well below the index’s 13.56%. Longer-term performance remains strong, with a 157.34% gain over three years, beating the S&P 500’s 71.42%.
As the merger battle unfolds, Netflix investors are weighing the strategic upside of a Warner combination against regulatory risk, balance sheet impact, and execution challenges. The all-cash pivot signals determination, but the road ahead remains complex and closely watched.
