"Netflix Inc.'s $72 billion acquisition of Warner Bros. Discovery Inc. includes one of the biggest breakup fees of all time - a $5.8 billion penalty that Netflix has agreed to pay its target if the deal falls apart or fails to win regulatory approval. At 8% of the deal's equity value, the fee is well above the average even in big-ticket dealmaking, signaling Netflix executives' confidence they can convince global antitrust watchdogs to let the transaction go ahead."
"Warner Bros., meanwhile, would have to pay a $2.8 billion reverse breakup fee if its shareholders vote down the deal. If Warner Bros. were to accept a rival offer, the new buyer, in effect, would be on the hook for that fee. Here are some of the biggest breakup fees in M&A history, according to data compiled by Bloomberg: AOL/Time Warner Inc. Deal value: $160 billion America Online Inc. agreed to pay a fee of about $5.4 billion"
Netflix agreed to pay a $5.8 billion breakup fee if its $72 billion acquisition of Warner Bros. Discovery fails or lacks regulatory approval. The fee represents about 8% of the deal's equity value, well above the 2024 average near 2.4%, indicating high confidence in securing antitrust clearance and reflecting intense bidding dynamics. Rival Paramount Skydance proposed a raised breakup fee of $5 billion in its sweetened offer. Warner Bros. would owe a $2.8 billion reverse breakup fee if shareholders reject the deal, potentially making a competing buyer responsible for that payment. Historical large fees include AOL/Time Warner's roughly $5.4 billion exposure.
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