Netflix's Acquisition of Warner Bros. Represents a Paradigm Shift in the Streaming Industry. Here Are 6 Things Investors Should Know About the Deal.

Netflix (NASDAQ: NFLX) could alteration the streaming and media industries everlastingly with its pending acquisition of Warner Bros. Discovery's (NASDAQ: WBD) movie and tv studios, which see HBO and HBO Max. It's 1 of the largest acquisitions ever announced successful each media. The woody does not see Warner Bros' cablegram assets, which volition beryllium spun disconnected into a abstracted company.

While the manufacture has already begun to consolidate, this signals a large shift, with galore much streaming companies apt to beryllium acquired successful the future, leaving a fewer ample competitors to predominate the space.

Here are six things investors should know.

Netflix volition get Warner Bros.' assets for a full endeavor worth of astir $83 billion, which includes astir $11 cardinal of nett indebtedness astatine Warner Bros. The woody values Warner Bros. astatine $27.75 per share. Netflix volition money 84% of the acquisition with currency and the remainder successful stock.

To enactment this successful perspective, Disney purchased Hulu successful a woody that valued the institution astatine $27.5 billion, though Disney didn't person to wage astir that overmuch due to the fact that it already had a important ownership stake. Amazon purchased MGM for astir $8.45 billion. Netflix's woody is besides somewhat bigger than Disney's $71 cardinal acquisition of astir of the assets of 21st Century Fox.

Netflix is making a important fiscal concern to unafraid this landmark deal. At the extremity of the 3rd quarter, the institution had astir $9.3 cardinal successful currency and equivalents, arsenic good arsenic an further $3.6 cardinal successful different existent assets that tin apt beryllium rapidly converted into cash. Netflix plans to usage $10.3 cardinal of its currency successful the deal. Then it volition spell retired and reportedly rise different $59 cardinal successful assorted eventual indebtedness instruments for the remainder of the financing, though the institution stated that it plans to usage lone $50 cardinal successful acquisition indebtedness for the deal.

Keep successful caput that Netflix already had adjacent to $14.5 cardinal of semipermanent indebtedness of its ain astatine the extremity of its astir caller quarter. The institution stated that it inactive intends to support an investment-grade recognition standing by implementing a accelerated indebtedness simplification program erstwhile the woody is closed.