Netflix–Warner deal faces uncertainty after Trump remarks
Netflix’s $72 billion acquisition of Warner Bros triggered a wave of price target cuts from Wall Street analysts, as U.S. President Donald Trump voiced concerns about the companies’ combined market share.
His remarks highlighted the intense scrutiny the deal is expected to face from regulators, News.Az reports, citing Reuters.
The agreement brings together the world’s largest streaming platform with HBO Max and a major Hollywood film studio. However, the merger has drawn bipartisan criticism from lawmakers and unions, who argue it could lead to job losses and higher prices for consumers.
Speaking at the Kennedy Center on Sunday, Trump warned that the expanded market share of the combined entity “could be a problem” and said he intends to be involved in reviewing the deal.
On Monday, White House economic adviser Kevin Hassett told CNBC that the U.S. Justice Department will spend “quite a while” examining the acquisition’s impact on competition.
Netflix has agreed to pay a $5.8 billion termination fee if the deal fails to gain regulatory approval — a signal of its confidence that the merger will ultimately be cleared.
To ease concerns of market concentration, it is likely to argue that the market for online video also includes YouTube and TikTok - two of the most popular platforms with hundreds of millions of users.
"Antitrust opposition stalls consummation of the deal for a couple of years, and raises at least an element of risk about completion," said Rosenblatt analyst Barton Crockett.
Hollywood unions have voiced concerns about increased market concentration, reduced film output and the potential for higher consumer costs.
Rival bidder Paramount Skydance has said the deal process was biased, raising chances of a higher bid or a hostile takeover.
The political dynamics may be further complicated by Warner Bros Discovery's rejection of Paramount Skydance, a studio with Trump connections, in favor of Netflix, analysts said.
At least three brokerages cut their price targets for Netflix, with consensus median price target now at $139, according to data compiled by LSEG.
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