Warner Bros. Discovery, Inc. 8-K

What Happened
Warner Bros. Discovery, Inc. (WBD) and Netflix, Inc. executed an Amended and Restated Agreement and Plan of Merger on January 19, 2026, (filed in an 8-K) that revises their previously announced transaction so that the $27.75 per-share consideration to WBD stockholders will be paid entirely in cash. The boards of WBD and Netflix unanimously approved the amendment, and WBD’s board has resolved to recommend the amended agreement to WBD stockholders; a joint press release was issued January 20, 2026.

Key Details

• Merger consideration: $27.75 per WBD share in cash at the effective time, subject to any net debt adjustment.
• Transaction structure: Holdco Merger (WBD becomes a NewCo subsidiary), an internal Separation and Distribution to create SpinCo (Global Linear Networks and related assets), then Merger Sub merges into NewCo so NewCo becomes a Netflix subsidiary.
• SpinCo net debt “Specified Amount”: $17.0 billion (as of June 30, 2026), stepping down to $16.1 billion by Dec 31, 2026; this Specified Amount was reduced by $260 million versus the original agreement. WBD may further elect a Specified Amount Reduction, which would reduce the per‑share cash price by a corresponding Net Debt Adjustment Amount.
• Timing, approvals and fees: Closing requires WBD stockholder approval, regulatory clearances (HSR and other approvals), and satisfaction of customary conditions; End Date for closing is Mar 4, 2027 (with up to two 3‑month extensions under conditions). If WBD terminates for a superior proposal (or certain other WBD actions), WBD may owe Netflix a $2.8 billion termination fee. If the deal fails due to regulatory injunctions or unmet regulatory approvals by the End Date, Netflix may owe WBD a $5.8 billion termination fee. The merger is not conditioned on financing.

Why It Matters
This amendment fixes the per‑share deal price at $27.75 in cash, removing stock consideration and simplifying the payout mechanics for WBD shareholders while preserving the planned separation of SpinCo. Important investor impacts include the cash certainty of $27.75 per share (subject to net debt adjustments), the creation and distribution of SpinCo (which will hold certain assets and its own targeted net debt), and significant termination fees that allocate regulatory and breakup risk between the parties. Shareholders should watch for the WBD shareholder vote, regulatory clearances, any Specified Amount Reduction by WBD, and filings/communications about the Separation and Distribution and treatment of equity awards.