"Netflix was clear from the beginning that it had zero interest in owning a declining asset like cable TV channels. By acquiring only the studio and HBO Max, the streamer grabs the creative engine behind the most valuable aspects of the business: Harry Potter , Game of Thrones , DC Comics, and HBO's prestige library. In exchange, Warner Bros is able to spin off a clean, focused, linear TV company."
"Netflix's winning bid, however, blends $23.25 per share in cash and $4.50 per share in Netflix stock, paving the way for Warner Bros to spin off its cable assets in Discovery Global, while also paying off most of its $40 billion in debt. While Netflix gains ownership over premium assets, it also introduces a level of risk investors may not be used to with the streamer, potentially dealing a crushing blow to portfolios holding the stock."
Netflix completed an $82.7 billion cash-and-stock acquisition of Warner Bros. film and TV studios and the HBO Max streaming service at $27.75 per share. The offer combined $23.25 per share in cash with $4.50 per share in Netflix stock. Warner Bros. will spin off its cable assets into Discovery Global and use proceeds to pay down most of about $40 billion in debt. The transaction followed competing bids from Paramount Skydance and Comcast, with Comcast facing potential antitrust scrutiny over cable channels. Netflix gains major IP and 100 million HBO Max subscribers, expanding its global reach and competitive moat while taking on new operational and investor risks.
Read at 24/7 Wall St.
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