NETFLIX INC 8-K

What Happened
Netflix, Inc. and Warner Bros. Discovery, Inc. (WBD) signed an Amended and Restated Agreement and Plan of Merger on January 19, 2026 that revises their previously announced deal so that WBD stockholders will receive $27.75 per share entirely in cash. The transaction retains the planned internal Holdco Merger and a Separation and Distribution (SpinCo) that will spin off WBD’s Global Linear Networks segment prior to the closing; Newco (WBD’s surviving entity after the Holdco Merger) will hold the Streaming and Studios businesses and merge into Netflix at closing. The boards of both companies unanimously approved the amended agreement; WBD filed a preliminary proxy on January 20, 2026.

Key Details

• Cash consideration: $27.75 per share of WBD common stock payable in cash at closing, subject to a Net Debt Adjustment.
• SpinCo net debt target: Specified Amount set at $17.0 billion as of June 30, 2026, declining to $16.1 billion as of December 31, 2026 (a $260 million reduction from the original agreement). WBD can elect further reductions (which lower Netflix’s per‑share price via the Net Debt Adjustment).
• Financing: Netflix increased bridge loan commitments from $34.0B to $42.2B via an Incremental Commitments Agreement dated January 19, 2026 to help fund the transaction. Receipt of financing is not a condition to close.
• Equity awards: Vested WBD options/RSUs convert to cash; many unvested awards will be assumed as contingent cash rights or adjusted (including an Equity Award Exchange Ratio for certain notional units).
• Closing conditions & timing: Subject to WBD stockholder approval, regulatory clearances (including HSR review), completion of the Separation and Distribution, and no blocking court/government order. Outside end date is March 4, 2027, with up to two automatic 3‑month extensions in limited circumstances.
• Termination fees: Certain terminations trigger a $2.8B fee payable by WBD to Netflix; under some regulatory failure scenarios Netflix would pay WBD $5.8B.

Why It Matters
This amendment converts the deal to an all‑cash acquisition at a fixed per‑share price, removing share dilution risk for Netflix shareholders but increasing the need for large external financing. The required bridge commitments ($42.2B) and the SpinCo debt allocation mechanics affect how value and leverage are distributed between the spun business and WBD stockholders. Key near‑term milestones for investors are the WBD shareholder vote, regulatory approvals, completion of the prescribed spin‑off, and how Netflix finances the transaction — each could affect Netflix’s leverage, cash needs and stock volatility. Review the forthcoming WBD proxy and Netflix filings for more details and timing.