Ankara: The acquisition race in the media and entertainment sector is heating up with Paramount's bid for Warner Bros. Discovery after the latter had already made a deal with Netflix. WarnerMedia, owned by telecommunications firm AT and T, merged with Discovery in 2022, forming Warner Bros. Discovery. However, rising competition, debt burden, and value losses led the firm to restructure in June.
According to Anadolu Agency, the firm announced plans to separate its studio and broadcasting operations from its global television networks, aiming to create two strong media entities, with the separation expected to be completed by mid-2026. Warner Bros. Discovery is also reviewing its option to sell the firm, as per a statement in October. The company confirmed it was proceeding with its plan to split into Warner Bros. and Discovery Global, while receiving offers for the entire company and for Warner Bros. alone.
Major media companies, including Netflix, Paramount, and Comcast, have submitted bids to acquire Warner Bros. Discovery. The Saudi Arabian Public Investment Fund (PIF) has also reportedly made large-scale investments in the global entertainment industry in recent years, entering the race to acquire the firm.
Netflix recently announced an agreement with Warner Bros. Discovery to acquire Warner Bros., including its film and television studios, HBO Max streaming platform, and HBO, in a deal valued at $72 billion in equity and $82.7 billion in total company value. Netflix plans to pay cash and stock, approximately $27.75 per share, with the acquisition expected to complete in the third quarter of 2026. Netflix executives are confident in finalizing the deal and receiving regulatory approvals.
Meanwhile, Paramount has submitted a new counteroffer for Warner Bros. Discovery. The platform's offer to shareholders is strategically and financially more beneficial than Netflix's offer, proposing to buy all Warner Bros. Discovery shares for $30 in cash per share, totaling $108.4 billion in enterprise value. This offer covers the entirety of the company, including its Global Networks segment, providing shareholders with $18 billion more in cash than Netflix's offer. Paramount is confident in the quicker approval of its offer due to its pro-competitive nature. Financial partners in Paramount's bid include PIF, Abu Dhabi's L'imad Holding, the Qatar Investment Authority (QIA), and Affinity Partners, owned by US President Donald Trump's son-in-law, Jared Kushner.
However, Comcast co-CEO Mike Cavanagh admitted that his company's bid for Warner Bros. Discovery lacks the cash compared to Netflix and Paramount's offers.
Netflix's deal for Warner Bros. has raised monopoly concerns due to the potential increase in Netflix's market share. Antitrust issues emerged after Netflix and Warner Bros. reached an agreement, with objections from both Republicans and Democrats in Congress. Republican Sen. Mike Lee opposed the deal, while Rep. Darrell Issa sent a letter to the Justice Department and the Federal Trade Commission (FTC). Democratic Sen. Elizabeth Warren described the deal as 'an anti-monopoly nightmare,' demanding a review.
Media industry groups like Cinema United, the Writers Guild of America, and the Independent Cinema Alliance have demanded the deal be blocked due to competition concerns, potential employment and wage decline, worsening conditions for media workers, higher consumer prices, and impacts on independent movie theaters.
Netflix requires international approval, in addition to approvals from the US and EU, for the deal to proceed. The deal faces criticism as it would significantly boost Netflix's market share. Warner Bros. Discovery shareholders' approval and the completion of financing are also required for the deal to close.
Paramount's offer will remain open for 20 business days, with a possible extension, while Warner Bros. Discovery has 10 business days to respond. Should Warner Bros. Discovery withdraw, it must pay Netflix a $2.8 billion termination fee. If the deal fails due to insufficient approvals, Netflix must compensate Warner Bros. Discovery $5.8 billion.