Netflix has ditched the stock-component of its original December 2025 offer, replacing the previous mix of cash and Netflix shares with a pure $27.75 per share cash payment. While the total enterprise value remains at $82.7 billion, the removal of stock eliminates “market-based variability,” making the deal significantly harder for Paramount to challenge.
Why Netflix Switched to All-Cash
- Share Price Volatility: Since the merger was first announced in December 2025, Netflix’s stock price has fluctuated, occasionally dipping below the “collar” price. By moving to cash, Netflix removes the risk that a falling share price would devalue the payout to WBD investors.
- Expedited Timeline: Co-CEO Ted Sarandos stated that the all-cash structure simplifies the transaction, allowing for a shareholder vote by April 2026—significantly faster than the original timeline.
- Blocking Paramount: Paramount Skydance had been aggressively campaigning that its $30-per-share hostile bid was superior because it was cash-heavy. Netflix’s pivot directly neutralizes this talking point.
The “Discovery Global” Spin-Off
A critical part of the Netflix deal remains the separation of WBD’s assets.Netflix is only buying the Streaming & Studios business (Warner Bros. Pictures, HBO, DC Studios).
- New Independent Entity: The linear TV networks (CNN, TNT, Discovery, etc.) will be spun off into a new company called Discovery Global.
- Retained Value: WBD shareholders will receive $27.75 in cash from Netflix plus shares in the newly formed Discovery Global.
- Valuation Dispute: While WBD boards value Discovery Global between $1.33 and $6.86 per share, Paramount has claimed the linear assets are “effectively worthless,” a claim WBD leadership has repeatedly rejected.
The Bidding War: Netflix vs. Paramount (As of Jan 21, 2026)
| Feature | Netflix (Board-Backed) | Paramount Skydance (Hostile) |
| Total Value | $82.7 Billion | $108.4 Billion |
| Offer Per Share | $27.75 Cash + Discovery Global Share | $30.00 All-Cash |
| Scope | Studios, HBO, & Streaming only | Entire WBD Company |
| Board Status | Unanimously Recommended | Rejected as “Inadequate” |
| Break-up Fee | $5.8 Billion (if Netflix pulls out) | $5.8 Billion |
Next Steps: The Shareholder Special Meeting
Warner Bros. Discovery has already filed its preliminary proxy statement with the SEC.
- April 2026: Target date for the special shareholder meeting to vote on the Netflix combination.
- Mid-2026: Expected completion of the Discovery Global spin-off.
- Q3 2026: Targeted closing date for the Netflix-Warner Bros. merger, subject to regulatory approvals.
Conclusion: A Historic Combination
If successful, the merger will unite Harry Potter, DC Comics, and Game of Thrones under the same roof as Stranger Things and Bridgerton. While Paramount continues to pursue its hostile tender offer (set to expire on January 21), the WBD board’s unanimous support for Netflix’s cash-certain deal suggests the streaming pioneer has successfully outflanked its rival.
