Netflix in exclusive talks to buy Warner Bros Discovery

Netflix has become the frontrunner to acquire the studios and streaming assets of Warner Bros Discovery, in a potentially seismic change for the industry.

The global streamer has entered into exclusive talks with WBD, following a second round of bids submitted earlier this week.

Bloomberg broke the news earlier this morning, with US reports suggesting that Netflix offered $28 per share.

Rival and one-time frontrunner Paramount Skydance had proposed a bid of $27 per share, although the David Ellison-led company would acquire the entirety of WBD.

While a deal remains far from certain, Netflix has also reportedly offered a $5bn break-up fee should the exclusive talks not progress to a sale, underlining the progress made in WBD’s bid to find a buyer.

The news follows reports earlier this week that the streamer – along with Paramount Skydance and Comcast - had made binding offers for parts or all of WBD during a second round of bidding for the US studio.

Paramount Skydance is seeking to buy the entirety of the company, while Netflix and Comcast are looking to buy the studio and streamers divisions.

The three companies had all previously made non-binding preliminary bids in late November.

Netflix had submitted an all-cash offer, with US reports suggesting that WBD chief exec David Zaslav is confident that a deal can be completed by the end of the year.

Regulatory approval will take far longer, however, with some estimates putting a timeline of a year on the process that will require both US and European greenlights.

WBD put itself on the block in October after three bids from Ellison’s Paramount Skydance were rejected.

Just how Netflix’s exclusive WBD negotiations move ahead remains to be seen, but the deal could reshape the global industry by handing the streamer a raft of assets including HBO and DC Comics.

Alongside the M&A process is the ongoing reorganisation of WBD, which chief exec David Zaslav unveiled last year.

That will see the US studio splitting the company in two, with Zaslav confirming last month that the process would continue alongside sale talks.

If Netflix is successful in its bid, it is expected that WBD’s cable assets such as TNT, Discovery and CBS would become a standalone entity, while HBO Max and the studio’s sprawling IP library becoming part of Netflix.