Lugano – Netflix has withdrawn from talks to acquire Warner Bros. Discovery, stating the proposed deal was no longer “financially attractive.”
In December last year, Netflix and Warner Bros. Discovery announced they had entered into a definitive agreement under which Netflix would acquire the company’s film and television studios, streaming platforms, including HBO and HBO Max, and its extensive content libraries.
The deal was valued at approximately USD $82.7 billion (MAD 755.8 billion) including debt.
Under that agreement, Warner Bros. Discovery shareholders would have received roughly USD $27.75 (MAD 254) per share in a mix of cash and stock.
Netflix’s decision to walk away from the deal follows a revised takeover offer from Paramount, valued at about USD $111 billion (MAD 1,015.65 billion) including debt, which surpassed Netflix’s earlier bid.
Paramount’s proposal would acquire the entire Warner Bros. Discovery operation, including its film and television studios, streaming platforms and traditional cable networks, a significantly broader scope than Netflix’s earlier offer.
As part of its effort to strengthen the bid, Paramount has also included a so-called “ticking fee,” under which it would pay 25 cents per share for every quarter the deal fails to close.
Originally set to begin at the end of the year, the fee would now apply if the transaction is not completed by the end of September.
Paramount has also included a USD $7 billion (MAD 64.07 billion)regulatory termination fee.
The proposed merger now enters a review phase, with regulatory approval and shareholder sign-off still required before it can be completed.
Earlier this month, California Attorney General Rob Bonta said his office would examine any deal involving Warner Bros. Discovery, describing the entertainment industry as a “critical sector” for California’s economy.
The transaction will also need to secure regulatory sign-off from the US Department of Justice and competition regulators in Europe before it can proceed.
