The U.S. Justice Department has launched an antitrust probe into Netflix's proposed 82.7 billion U.S. dollars acquisition of Warner Bros. Discovery's film, television, and streaming assets, intensifying scrutiny over the company's market power, according to the UK's Financial Times.
The probe aims to assess whether the deal could enable Netflix to further consolidate and potentially abuse its market dominance, thereby suppressing competition.
In December last year, Netflix and Warner Bros. Discovery reached an acquisition agreement valued at 27.75 U.S. dollars per share, to be paid through a combination of cash and stock. The transaction targets Warner Bros. Discovery's television and film production studios along with its streaming services, while its cable television networks will be spun off as an independent, publicly traded company.
Just days after the agreement was announced, Paramount Skydance launched a hostile takeover bid for Warner Bros. Discovery, proposing an all-cash acquisition of all outstanding shares with the aim of taking control of the company's entire asset portfolio.
The unsolicited offer is reportedly valued at about 108.4 billion U.S. dollars, which has also drawn scrutiny from the U.S. Justice Department.
Neither Netflix nor Warner Bros. Discovery has mounted a strong challenge to the ongoing antitrust probe.
Netflix said that, aside from standard merger review procedures, it is not aware of any additional investigations concerning its business.
A Warner Bros. Discovery spokesperson expressed confidence that the transaction with Netflix would satisfy all regulatory approval requirements.
US Justice Department launches antitrust probe into Netflix's USD 82.7 bln Warner Bros. deal
