Netflix (NASDAQ:NFLX) has secured up to $25 billion in bank financing to fund its proposed $72 billion acquisition of Warner Bros. Discovery’s movie studio and HBO Max streaming business.
The financing includes a $5 billion senior unsecured revolving credit facility and two senior unsecured delayed-draw term-loan facilities totaling $20 billion, as disclosed in a Monday filing with the Securities and Exchange Commission.
The financing will be used to fund the cash consideration of the deal, cover related fees and expenses, refinance debt, and support general corporate purposes.
The revolving credit facility will mature three years after the deal closes or is terminated, or by December 19, 2030, whichever occurs first.
In addition to the revolving credit facility, Netflix secured two delayed-draw term-loan facilities, consisting of a $10 billion two-year facility and a $10 billion three-year facility.
Netflix has the option to prepay these loans, or reduce or terminate the unutilized portion without penalty.
However, prepaid amounts may not be reborrowed.
This acquisition, which will see Netflix buy Warner Bros. for $27.75 a share in cash and stock, outbid competitors Paramount and Comcast, and is poised to solidify Netflix's already dominant position in the media industry.
The deal, which follows Warner Bros. splitting its studios and HBO Max streaming business from its cable networks, is expected to face scrutiny from the Justice Department, which is investigating how the merger would affect competition in the media space.
Netflix’s bid has already prompted significant backlash, with critics arguing the acquisition could further concentrate Hollywood’s power, while others have raised concerns about the future of movie theaters.
Meanwhile, Paramount made an unsolicited all-cash bid for Warner Bros. last week, though it was later rejected by the company.