Regulatory Scrutiny Intensifies for Netflix’s Mega-Acquisition

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Netflix's proposed $82.7 billion all-cash acquisition of Warner Bros. Discovery is encountering mounting political and regulatory challenges on both sides of the Atlantic. This pressure is reflected in the streaming giant's share price, which has retreated significantly from its mid-2025 highs as investors weigh the uncertain approval landscape.

A key milestone in the U.S. review process is scheduled for February 3, 2026. On that date, the Senate Antitrust Subcommittee will convene a hearing to examine the potential competitive implications of the deal. Netflix Co-CEO Ted Sarandos and Warner Bros. Discovery's Chief Strategy Officer, Bruce Campbell, are slated to testify. This hearing signifies a formal escalation of the political examination facing the merger.

European and British Opposition Mounts

Across Europe, regulatory hurdles are growing. Executives from Paramount-Skydance have reportedly expressed expectations that European regulators will move to block the Netflix-WBD combination, citing the European Union's stringent enforcement history against major technology conglomerates. The European Commission is anticipated to conduct parallel reviews of both Netflix's bid and a competing hostile takeover offer from Paramount, valued at $30 per share.

Separately, in the United Kingdom, more than a dozen politicians and former officials—including three ex-culture secretaries and a former BBC director-general—have petitioned the Competition and Markets Authority. In a jointly signed letter, they urged a thorough investigation, warning that the transaction would "entrench an already dominant player in the TV streaming market" and risk "a substantial lessening of competition with harmful consequences for consumers."

Netflix Confident Amid Operational Strength

Despite the headwinds, Netflix leadership has expressed confidence. During the Q4 2025 earnings presentation, Ted Sarandos stated the company is working "closely with WBD and regulators, including the U.S. Department of Justice and the European Commission," and remains convinced it will secure all necessary approvals.

The company's operational performance provides a strong backdrop. For the full year 2025, Netflix reported revenue of $45.18 billion, a 16% year-over-year increase. Operating income jumped 28% to $13.33 billion, while net profit rose 26% to nearly $11 billion. The Asia-Pacific region was a particular highlight, posting growth of 21%.

Deal Mechanics and a Competing Bid

In a move to streamline the transaction, Netflix converted its offer to a pure cash deal in January 2026. This simplification could potentially accelerate the timeline for a vote by Warner Bros. Discovery shareholders, which might now occur as early as March 2026.

The process is being monitored at the national level by the U.S. Department of Justice. Meanwhile, the competing hostile offer from Paramount for all of WBD, including its cable networks, is set to expire on February 20, 2026, unless it is extended.

Key Data Points:
* Acquisition Value: $82.7 billion (all-cash)
* U.S. Senate Hearing: February 3, 2026
* Competing Paramount Bid: $30 per share
* Paramount Offer Expiry: February 20, 2026
* Netflix 2025 Revenue: $45.18 billion (+16%)
* Netflix 2025 Net Profit: ~$11 billion (+26%)

The coming weeks are poised to be critical. With the Senate hearing in early February and the lapse of the Paramount offer mid-month, pivotal decisions that will shape the deal's future are rapidly approaching.