President Donald Trump stated that he will personally oversee the review of Netflix’s (NFLX) proposed $72 billion acquisition of Warner Bros. Discovery’s (WBD) TV, film studios, and streaming division. Trump expressed concerns that the combined company’s market share “could be a problem,” highlighting potential regulatory scrutiny.
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The deal faces both industry and political scrutiny that will likely influence whether regulators approve this significant consolidation in the entertainment landscape. Meanwhile, rivaling bidder Paramount Skydance (PSKY), which has raised concerns about Netflix’s screening process, has decided to make a last-minute attempt through a hostile bid by appealing directly to Warner Bros.’ shareholders.
Here’s What Happened
The Warner Bros. Discovery board approved Netflix’s mostly-cash offer valuing the acquisition at $72 billion, or $82.7 billion including debt. Netflix’s $28 per share bid for the split company was deemed superior to Paramount Skydance’s $30 per share offer for the entire company, after a competitive bidding process that also involved Comcast (CMCSA). Netflix and Comcast were interested only in Warner Bros. Discovery’s TV, movie, and HBO streaming businesses, while Paramount was the only company pursuing Warner Bros. in its entirety.
Critics warn that combining Netflix and Warner Bros. would create one of the largest media companies controlling nearly half of the streaming market. They argue this could lead to higher subscription fees, reduced viewing options, and possible job losses in the U.S. Conversely, Netflix asserts the deal would generate new jobs and enhance value for its subscribers.
Netflix-WBD Deal Could Face Stringent Scrutiny
The deal will likely finish after Warner Bros. Discovery separates its global networks unit, Discovery Global, into its own public company, expected by the third quarter of 2026. Netflix has offered WBD a $5.8 billion breakup fee, and the latter would pay Netflix $2.8 billion if the deal falls through. Netflix expects to save $2 to $3 billion annually by the third year after the deal is completed.
It remains to be seen how Paramount Skydance will proceed with its hostile bid and whether Netflix will receive its shareholders’ approval and President Trump’s green light to move forward with the acquisition. Netflix’s co-CEO, Ted Sarandos, met with Trump in mid-November to discuss the potential deal. While Trump praised Sarandos, he stressed that Netflix already holds a significant portion of the streaming market, requiring careful examination of the deal’s impact.
Is NFLX Stock a Buy?
On TipRanks, Netflix stock has a Moderate Buy consensus rating based on 28 Buys, seven Holds, and two Sell ratings. The average Netflix price target of $137.65 implies 37.3% upside potential from current levels. Year-to-date, NFLX stock has gained 12.5%.
