Netflix becomes frontrunner in Warner Bros Discovery streaming and studio sale | Mergers and acquisitions

Warner Bros. Discovery enters exclusive talks to sell streaming and Hollywood studio business to Netflix; This is a move that will significantly change the established world of film and TV.

Netflix is ​​competing with Hollywood studio Warner Bros., Paramount Skydance and Comcast, which owns assets such as Universal Studios and Sky, to acquire streaming service HBO and HBO Max.

Netflix will offer a $5bn (£3.7bn) breakup fee if the deal fails to gain regulatory approval in the US, according to Bloomberg, which first reported the private talks.

Warner Brothers Discover shares are currently around $24, giving it a market cap of around $60 billion. Netflix is ​​reportedly offering between $28 and $30 per share, suggesting its bid could be between $70 and $75 billion.

Analysts have warned that the deal could raise competition concerns because it would result in the merger of the two largest streaming services in the United States.

Netflix has assured that it will continue to allow the Warner Bros movie studio, home to franchises such as Harry Potter and Batman, to continue wide theatrical releases.

Before any deal closes, Warner Bros. Discovery will complete the planned spin-off of its cable channels, including CNN, TBS and TNT.

The deal will result in Netflix owning an extensive TV library from HBO, which produces popular series such as Succession, The White Lotus, The Sopranos and Game of Thrones, as well as classics such as Friends, which will soon be unavailable on Netflix.

Warner Bros. officially put it up for sale in October, following interest from various parties.

Earlier this week, James Cameron, director of the Titanic, Terminator and Avatar series, warned that a sale to Netflix would lead to a “catastrophic loss of long-term value” for the entertainment industry.

Paramount, run by David Ellison and financed by his billionaire father and Oracle founder Larry, was seen as the early pioneer.

Paramount, which owns assets including Channel 5 in the UK, had also offered a $5 billion termination fee if a deal was reached but failed to obtain regulatory clearance.

Earlier this week, Paramount argued in a letter to Warner Bros. that its proposal would likely win regulatory clearance.

Paramount accused Warner Bros. of running an unfair bidding process in Netflix’s favor. In the letter from the trial lawyer, the company called the process “flawed.”

Warner Bros., Netflix, Comcast and Paramount declined to comment.