Netflix said it has secured up to $25 billion in bank financing in preparation to fund its proposed acquisition of much of Warner Bros. Discovery.
The streaming giant entered into a $5 billion senior unsecured revolving credit facility and two senior unsecured delayed-draw term-loan facilities totaling $20 billion, according to a Monday filing with the Securities and Exchange Commission.
Netflix earlier this month agreed to buy Warner Bros. for $72 billion after the entertainment company splits its studios and the HBO Max streaming business from its cable networks. Its new financing will help fund the cash considerations of the deal, as well as pay related fees and expenses, refinance debt and for general corporate purposes.
The revolving credit facility will mature three years after the Warner Bros. deal closes, three years after the deal is terminated, or by Dec. 19, 2030--whichever occurs earliest, according to the filing.
The delayed-draw term-loan facilities consist of a $10 billion two-year facility and a $10 billion three-year facility. Netflix may prepay the loans, or reduce or terminate the unutilized portion of the commitments, without penalty, but prepaid amounts may not be reborrowed, according to the filing.
Both facilities replace a portion of commitments under a previously disclosed bridge-financing agreement tied to the deal.
Netflix beat out Paramount and Comcast to buy Warner Bros., agreeing to pay $27.75 a share in cash and stock for the company's movie studio and HBO Max streaming business after the entertainment company splits itself in two.
Still, the deal is expected to be investigated by the Justice Department, which has already begun considering how the tie-up would further cement Netflix's dominance in the media industry. Other critics of the deal have argued it would ruin Hollywood, prompting executives in part to promise to keep movies in theaters.
Paramount had accused Warner Bros. of unfairly favoring Netflix's deal. The company went hostile and made an unsolicited all-cash bid for Warner Bros. last week, though the company later recommended that shareholders reject the offer.
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