Netflix Plans Tens of Billions Borrowing to Back Warner Bros Acquisition

Bloomberg reported that Netflix Inc. arranged about $59 billion of unsecured bridge financing from Wall Street banks to fund a proposed acquisition of most of Warner Bros. Discovery, according to coverage dated December 5 and subsequent summaries appearing December 10 and 11. The proposed deal carries headline figures including a roughly $72 billion purchase price, a cash and stock offer of $27.75 per share to Warner Bros. shareholders, and an implied enterprise value near $82.7 billion. Wells Fargo, BNP Paribas and HSBC are named as providers of the bridge loan, which sources said was intended as temporary financing to be replaced later by long term instruments.

The $59 billion package would rank among the largest bridge financings ever recorded, second only in scale to Anheuser Busch InBevs $75 billion bridge for SABMiller in 2015. Industry participants said the bridge is expected to be swapped for a mix of corporate bond issuance, delayed draw term loans and revolving credit facilities, but that replacement will depend on market appetite and the outcome of any bidding contest. Paramount Skydance has been reported as mounting a rival approach, complicating timing and lender commitments.

Analysts cited in the coverage emphasized that Netflixs credit profile has strengthened since the companys more heavily indebted phase. Stephen Flynn, a senior credit analyst at Bloomberg Intelligence, said, "Netflixs credit profile really turned around" and that the company has "come a long way from high yield." Still, the proposed acquisition would mark a material increase in leverage for a company that has rebuilt its balance sheet since the pandemic era. That trade off could give Netflix the firepower to pursue scale in content and advertising, while also exposing it to higher interest costs and refinancing risk.

Market implications are immediate. A bond financed replacement of the bridge could send a large supply wave into corporate credit markets, testing demand for high quality issuers and pressuring spreads if investors demand higher compensation for concentrated sector risk. Banks that underwrote the bridge face execution risk if Netflix is drawn into a bidding war or if market volatility makes long term financing more expensive. Lenders may seek covenants or provisions linked to the fate of competing bids, a step that could limit Netflixs optionality.

Regulatory considerations add another layer of uncertainty. Observers warned that the size of the debt and the consolidation of major studios within a single streaming firm could attract scrutiny from competition authorities, although no regulator has opened a formal inquiry. For investors and consumers, the transaction highlights the ongoing consolidation trend in media, where scale is increasingly prized as firms compete for content libraries and ad revenue. The next key developments will be whether the bridge is syndicated beyond the named banks, what conditional terms attach to lenders commitments, and how Netflix intends to structure permanent financing in an interest rate environment that is less forgiving than it was a few years ago.