Skadden Arps Slate Meagher & Flom, Wachtell Lipton Rosen & Katz and Debevoise & Plimpton have been called in for Netflix’s blockbuster acquisition of Warner Bros Discovery’s TV, film studios and streaming division, one of the largest M&A deals of the year.
Skadden is acting for Netflix on the deal, with Wachtell and Debevoise & Plimpton across the table for Warner Bros Discovery (WBD). The cash and stock transaction is valued at $27.75 per WBD share, with a total enterprise value of $82.7bn and an equity value of $72bn.
The deal is expected to close after the previously announced separation of WBD’s cable networks business, Discovery Global, into a new publicly-traded company, which is now expected to be completed in Q3 2026.
The agreement follows a weeks-long bidding war that saw Netflix best rivals Comcast and Paramount Skydance.
The Skadden team is being led by M&A partners Kenton King and Sonia Nijjar in Palo Alto and Lauren Kramer in New York. The trio have acted in major Silicon Valley deals including advising Activision Blizzard in its $75bn acquisition by Microsoft, while Nijjar previously acted for Netflix when it bought visual effects business Scanline VFX and animation studio Animal Logic.
Meanwhile the Wachtell team is headed by corporate partners Andrew Nussbaum and Karessa Cain. Both Wachtell and Debevoise were involved in the $43bn merger that created WBD in 2021, when AT&T, repped by Sullivan & Cromwell, combined its WarnerMedia studios business with Discovery’s entertainment and sports channels. Debevoise acted for Discovery on the deal, while Wachtell advised the company’s independent directors.
Alongside Kirkland & Ellis, Wachtell has also been guiding WBD on the separation of its cable TV businesses from its streaming and studio operations.
Under the terms of the Netflix agreement, each WBD shareholder will receive $23.25 in cash and $4.501 in shares of Netflix common stock for each share of WBD common stock outstanding at the closing of the transaction.
The deal will likely face strong antitrust scrutiny in Europe and the US, however, as it would give the world’s laregst streaming service ownership of a rival that is home to HBO Max and boasts almost 130 million streaming subscribers, Reuters reported.
The deal is also facing opposition from within the entertainment industry and from politicians, who argue it could harm Hollywood and consumers. Democratic senator Elizabeth Warren said Friday (5 November) the deal “looks like an anti-monopoly nightmare”, while Cinema United, a trade association that represents 56,000 movie screens globally, said the deal poses an “unprecedented threat” to movie theatres.
Paramount, which kicked off the bidding war with a series of unsolicited offers, has reportedly engaged Quinn Emanuel to call foul on how WBD had conducted the sale process. On 3 December lawyers from the firm sent a letter to WBD CEO David Zaslav that questioned the “fairness and adequacy” of the process and alleged favourable treatment to Netflix, according to CNBC.
Netflix said the deal would give subscribers more choice, allow it to significantly boost US production and long-term investment in original content and create more jobs and opportunities for creative talent.
Allen & Company, JP Morgan and Evercore are serving as financial advisors to WBD.
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