Netflix’s Potential Acquisition of Warner Bros.
Netflix (NASDAQ: NFLX) announced plans to acquire Warner Bros. Discovery (NASDAQ: WBD) in a cash-and-stock deal valued at $82.7 billion, which would significantly expand its content library, including access to HBO Max and various TV and movie studios. If successful, this acquisition could lead to Netflix incurring up to $59 billion in new debt, adding to its existing $14.5 billion in long-term debt.
Warner Bros. has struggled financially, generating a net income of only $482 million on $37.9 billion in revenue over the past year, resulting in a low profit margin of 1.3%. In contrast, Netflix has maintained a profit margin of 24%. Regulatory hurdles and competing bids, such as one from Paramount Skydance, pose significant challenges for the deal’s completion.
