Netflix Media/Merger press release



= Disney and Netflix to Combine in Merger of Equals = Combination of two iconic entertainment powerhouses will cement status as world’s largest media conglomerate

Enhanced scale and financial strength will accelerate investment in transformative technology to embrace disruption in the media landscape

Decreasing cost of content creation will create opportunities to build scale in specialized businesses across a larger consumer base

Compelling value creation expected for both companies’ shareholders as demonstrated by double-digit earnings per share accretion by 2021

Estimated net cost synergies of at least $1.6 billion by 2027

Proven management teams with history of successful acquisitions, strong risk management skills and shared mission- and creative cultures

Combined company to operate under a new name and be headquartered in New York City while maintaining significant operations and investment in California and Florida

Burbank, CA and Los Gatos, CA, February 7, 2025 – Netflix, Inc. (NASDAQ:NFLX) and The Walt Disney Company (NYSE: DIS) announced today that both companies’ boards of directors have unanimously approved a definitive agreement to combine in an all-stock merger of equals valued at approximately $200 billion. The combined company will cement its status as the world’s largest media and entertainment conglomerate.

The pro forma company will have approximately $442 billion in assets, with great brands such as Netflix, Pixar, Marvel, Lucasfilm, Disney, National Geographic, and Millarworld among many others.

In a reflection of the equal contribution both companies bring to the new institution, the combined company will operate under a new name and brand, which will be determined prior to closing. The combined company’s board of directors and executive management team will be evenly split between the two institutions. A new corporate headquarters will be established in New York City, including an Innovation and Technology Center to drive digital transformation. In the current corporate homes for both California-based companies, the combined company will maintain the Walt Disney Studios in Burbank and the Netflix campus in Los Gatos, while the Disney Parks, Experiences and Products division will remain in Lake Buena Vista, Florida. This continued strong presence is also supported by the combined company’s commitment to increase the respective studios’ current levels of community investment.

GAAP and Cash EPS accretion per Disney share in 2021 is expected to be approximately 13% and 17%, respectively (based on Street estimates). GAAP and Cash EPS accretion per Netflix share in 2021 is expected to be approximately 9% and 16%, respectively (based on Street estimates). Netflix shareholders will receive a 5% increase in their dividend upon consummation of the transaction based upon each Company’s current dividend per share. Under the terms of the merger agreement, Netflix shareholders will receive 1.295 shares of Disney for each Netflix share they own. Disney shareholders will own approximately 57% and Netflix shareholders will own approximately 43% of the combined company.

"Unlike our previous deals with Pixar, Marvel, Lucasfilm, and 21st Century Fox, this is a true merger of equals. It combines the best of both companies to create the premier media company of the future,” said Walt Disney Company Chairman and Chief Executive Officer Bob Chapek. “It’s an extraordinarily attractive financial proposition that provides the scale needed to compete and win in the rapidly evolving world of content. Together with Reed’s leadership and our new Netflix teammates, we’re going to bring the best of both companies forward to serve our subscriber and fan bases.”

Reed Hastings, co-founder and co-Chief Executive Officer of Netflix, said, “By bringing together these two media and entertainment institutions, we will accelerate our capacity to invest in transformational technologies for content creation and consumption. Our shared culture embraces the disruption of technology and decreasing costs of content creation, and we will take this innovative mindset to expand our leadership in the next chapter of these iconic brands. With our geographic position, enhanced scale and leading financial profile, these two companies will achieve substantially more for consumers, employees, cast members, actors, content creators, and shareholders than we could alone. I have tremendous respect for Bob, his leadership team and the Disney associates. We will leverage our respective strengths as we focus together on the future.”

Strategic and Financial Benefits of the Proposed Merger

Strong Cultural Alignment: The combined company will preserve and maintain the strong cultures of both Disney and Netflix to deliver premium content on all platforms. With its stronger position, it will also deliver a collective set of training, leadership, and development programs to attract and retain the industry’s top talent across its expanded career opportunities.

Leading Financial Profile and Operating Metrics: The combined company will be well positioned to achieve industry-leading financial and operating metrics with the strongest return profile amongst its peers. The expected benefits of the transaction include a pro forma efficiency ratio of 51%, peer best ROATCE of 22% and projected tangible book value per share accretion at close for Disney shareholders of approximately 11%, or 6% fully accounting for one-time merger charges. The merger is expected to generate an internal rate of return of approximately 18%.

Increased Profitability and Scale to Drive New Innovations: The combined company will take advantage of its enhanced scale to focus on selecting best of breed systems and processes and making significant investments in technology to create a sustainable competitive advantage in an increasingly digital-first world.

Revenue Growth Through Complementary Businesses: The combined company will leverage its complementary businesses to generate additional revenue opportunities through Disney’s movie and television production operation and Netfluix’s leading streaming business and quality original content.

Significant cost synergies: Expected to deliver approximately $1.6 billion in annual net cost synergies by 2022. The primary sources of cost savings are expected to be in facilities, information technology/systems, shared services, in-house production/distribution and third-party vendors.

New Company Leadership Team, Succession Plan and Governance

Bob Chapek, Chairman and Chief Executive Officer of The Walt Disney Company, will serve as Chairman and Chief Executive Officer of the combined company until Sept. 12, 2026, after which time he will serve as Executive Chairman of both entities until March 12, 2027. Chapek will continue to serve on the Board of Directors of the combined company until the end of 2028.

Reed Hastings, co-founder and co-Chief Executive Officer of Netflix, will serve as President and Chief Operating Officer of the combined company until Sept. 12, 2026, at which time co-CEO and Chief Creative Officer Ted Sarantos will become Chief Executive Officer of the combined company. He will also hold a seat on the combined company’s Board of Directors through his position as President and Chief Operating Officer and then Chief Executive Officer. On March 12, 2027, Sarantos will also become Chairman and Chief Executive Officer of the combined company.

Upon the closing of the transaction, the Board of Directors of the combined company will consist of members equally split between Disney and Netflix’s current Directors. Bela Bajaria, current Head of Global TV at Netflix, will serve as Lead Director of the combined company until March 12, 2027.

The combined company’s executive management team will be comprised equally from Disney and Netflix.

Timing and Approvals

The merger is expected to close in the fourth quarter of 2025, subject to satisfaction of customary closing conditions, including receipt of customary regulatory approvals and approval by the shareholders of each company.

Advisors

RBC Capital Markets served as financial advisor and Wachtell, Lipton, Rosen & Katz served as legal counsel to Disney in this transaction. Goldman Sachs served as financial advisors and Sullivan & Cromwell served as legal counsel to Netflix in this transaction.

Investor Call

To listen to Disney and Netflix’s live conference call at 8:30 a.m. ET today, please call 888-599-8685 and enter the participant code 888 814. A presentation will be used during the earnings conference call and is available on Disney’s website or Netflix’s website. Replays of the conference call will be available for 30 days.

Website

You can also hear from both CEOs and learn more about today’s announcement at: https://thepremiermediacompany.com/.

About The Walt Disney Company

The Walt Disney Company (NYSE:DIS), together with its subsidiaries and affiliates, is a leading diversified international family entertainment and media enterprise that includes Disney Parks, Experiences and Products; Disney Media & Entertainment Distribution; and three content groups—Studios, General Entertainment and Sports—focused on developing and producing content for DTC, theatrical and linear platforms. Learn more at www.thewaltdisneycompany.com.

About Netflix

At Netflix, we want to entertain the world. Whatever your taste, and no matter where you live, we give you access to best-in-class TV shows, movies and documentaries. Our members control what they want to watch, when they want it, with no ads, in one simple subscription. We’re streaming in more than 30 languages and 190 countries, because great stories can come from anywhere and be loved everywhere. We are the world’s biggest fans of entertainment, and we’re always looking to help you find your next favorite story. Learn more at www.netflix.com.

Forward Looking Statements

This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, business plans and the future performance of Disney and Netflix. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “projects,” “could,” “may,” “should,” “will” or other similar words and expressions are intended to identify these forward-looking statements. These forward-looking statements are based on Disney’s and Netflix’s current expectations and assumptions regarding Disney’s and Netflix’s businesses, the economy, and other future conditions.

Because forward-looking statements relate to future results and occurrences, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict. Many possible events or factors could affect Disney’s or Netflix’s future financial results and performance and could cause actual results or performance to differ materially from anticipated results or performance. Such risks and uncertainties include, among others: the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the definitive merger agreement between Disney and Netflix, the outcome of any legal proceedings that may be instituted against Disney or Netflix, delays in completing the transaction, the failure to obtain necessary regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the transaction) and shareholder approvals or to satisfy any of the other conditions to the transaction on a timely basis or at all, the possibility that the anticipated benefits of the transaction are not realized when expected or at all, including as a result of the impact of, or problems arising from, the integration of the two companies or as a result of the strength of the economy and competitive factors in the areas where Disney and Netflix do business, the possibility that the transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events, diversion of management’s attention from ongoing business operations and opportunities, potential adverse reactions or changes to business or employee relationships, including those resulting from the announcement or completion of the transaction, the ability to complete the transaction and integration of Disney and Netflix successfully, and the dilution caused by Disney’s issuance of additional shares of its capital stock in connection with the transaction.

Except to the extent required by applicable law or regulation, each of Disney and Netflix disclaims any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. Further information regarding Disney, Netflix and factors which could affect the forward- looking statements contained herein can be found in Disney’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, its Quarterly Reports on Form 10-Q for the three-month periods ended March 31, 2018, June 30, 2018 and September 30, 2018, and its other filings with the Securities and Exchange Commission (“SEC”), and in Netflix’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, its Quarterly Reports on Form 10-Q for the three-month periods ended March 31, 2018, June 30, 2018 and September 30, 2018, and its other filings with the SEC.

Additional Information and Where to Find It

In connection with the proposed merger with Netflix, Disney will file with the SEC a registration statement on Form S-4 to register the shares of BB&T’s capital stock to be issued in connection with the merger. The registration statement will include a joint proxy statement/prospectus which will be sent to the shareholders of Disney and Netflix seeking their approval of the proposed transaction.

INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT ON FORM S-4, THE JOINT PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION BECAUSE THESE DOCUMENTS DO AND WILL CONTAIN IMPORTANT INFORMATION ABOUT DISNEY, NETFLIX, AND THE PROPOSED TRANSACTION.

Investors and security holders may obtain copies of these documents free of charge through the website maintained by the SEC at www.sec.gov or from The Walt Disney Company at its website, www.thewaltdisneycompany.com, or from Netflix at its website, www.netflix.com. Documents filed with the SEC by Disney will be available free of charge by accessing Disney’s website at http://thewaltdisneycompany.com/ under the tab “About Us” and then under the heading “Investor Relations” or, alternatively, by directing a request by telephone or mail to The Walt Disney Company,

500 S. Buena Vista St. Burbank, CA, 91521 (336) 733-3065, and documents filed with the SEC by Netflix will be available free of charge by accessing Netflix’s website at http://netflix.com/ under the tab “Investor Relations,” and then under the heading “Financial Information” or, alternatively, by directing a request by telephone or mail to Netflix, Inc., 900 Winchester Circle, Los Gatos, CA 95032, (877) 930-8971.

Participants in the Solicitation

The Walt Disney Company, Netflix, Inc., and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Disney and Netflix in connection with the proposed transaction under the rules of the SEC. Certain information regarding the interests of these participants and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the joint proxy statement/prospectus regarding the proposed transaction when it becomes available. Additional information about Disney, and its directors and executive officers, may be found in the definitive proxy statement of Disney relating to its 2026 Annual Meeting of Shareholders filed with the SEC on March 15, 2018, and other documents filed by Disney with the SEC. Additional information about Netflix, and its directors and executive officers, may be found in the definitive proxy statement of Netflix relating to its 2018 Annual Meeting of Shareholders filed with the SEC on March 9, 2025, and other documents filed by Netflix with the SEC. These documents can be obtained free of charge from the sources described above.