Netflix Secures Deal to Acquire Warner Bros. Discovery, Faces Regulatory Scrutiny
Netflix has entered into an agreement to acquire Warner Bros. Discovery, a move that would combine two major players in the entertainment industry. The deal, valued at $72 billion, positions Netflix as a dominant force in the streaming market, surpassing previous competitors Paramount and comcast in the bidding process.
However, the acquisition is not yet final and requires approval from regulatory bodies both within the United States and internationally. the U.S. Department of Justice has already begun reviewing the potential impact of the merger on competition within the streaming landscape. The White House is also closely monitoring the transaction.
A significant financial commitment underscores Netflix’s confidence in securing approval. The company has agreed to a penalty of $5.8 billion - approximately 8% of the total acquisition cost - should the deal fail to receive necessary government clearances. This penalty is notably higher than the typical 1-3% seen in similar acquisitions.
Currently, Netflix and Warner Bros. Discovery’s streaming service, HBO Max, collectively hold around 30% of the U.S. subscription streaming market. U.S. department of Justice guidelines from 2023 suggest mergers resulting in a combined market share exceeding 30% may be deemed illegal.
Netflix argues that the streaming market should be viewed more broadly, including free video platforms like YouTube, Facebook, and TikTok, and maintains that the merger will not negatively impact competition or consumers.
the acquisition encompasses Warner Bros.’ film and television studio, and also its streaming service. regulatory reviews are ongoing,and the final outcome remains uncertain.
(Source: Yonhap News)
