Netflix, and even bringing HBO under its umbrella... Warner Bros. acquisition enters the final countdown

In a mega acquisition battle that could shake up the global media industry, Netflix appears to have moved a step closer to acquiring Warner Bros. Discovery. If a traditional Hollywood media company joins forces with a modern streaming giant, it is expected to bring about significant changes to the market landscape.

According to multiple sources cited by Bloomberg on December 5 (local time), Warner Bros. has entered into exclusive negotiations with Netflix. If talks go smoothly, an official announcement could be made within days. The acquisition targets under discussion include the film/TV studio and the streaming platform HBO Max division. Warner Bros. plans to spin off its separately owned cable TV division before selling it.

Warner Bros. Discovery was formed in 2022 following the merger of WarnerMedia and Discovery Channel. The large media group not only owns film/TV production studios, but also offers various pay-TV and streaming services, including HBO Max, CNN, TNT, and Discovery Channel, with an estimated enterprise value of about $60 billion (approximately KRW 88.2 trillion). Three companies—Netflix, Paramount, and Comcast—are participating in the acquisition battle, with Netflix reportedly offering the highest bid.

Netflix has proposed paying about 85% of the bid amount in cash, demonstrating a more aggressive acquisition intent than its rivals. However, the biggest variable remains the antitrust review, which is common in such large-scale mergers and acquisitions. It is reported that Netflix, in anticipation of a possible failure to secure regulatory approval, has offered a $5 billion (about KRW 7.3 trillion) breakup fee if the deal is canceled.

Meanwhile, Paramount, another bidder, has raised concerns about the fairness of the bidding process and has formally sent a letter of protest. Paramount claims that Warner Bros. is advancing the process in a way that favors Netflix without conducting an independent analysis, and criticizes this move as contrary to shareholder interests. Warner Bros. distributed the letter to its board of directors and responded by stating it will make a prudent decision.

This development is expected to have a major impact on the restructuring of the streaming industry. If Netflix successfully acquires traditional media assets including HBO Max, its content acquisition capabilities and platform influence will be further enhanced. It is expected that major streaming competitors such as Disney+, Apple TV, and Amazon Prime will also have to seek new strategies in response.