Warner Bros. Discovery’s planned divestiture of its Warner Bros. studio assets to Netflix for $72 billion is now awaiting in-depth scrutiny by European competition authorities. The European Commission opened its Phase I review on January 15, 2026, with an initial decision due by March 15, 2026. Should significant market overlaps be identified—particularly in film licensing, pay-TV channels and streaming rights—the Commission can refer the transaction to a Phase II probe, extending the review into late June. WBD derives approximately 35 percent of its total revenue from Europe, including strong footholds in the U.K., Germany and France, and local regulators are examining whether the deal would unduly restrict competition in studio output, theatrical distribution and third-party streaming partnerships across the bloc’s 27 member states.

Investors are closely monitoring the European approval process because any delay or imposition of remedies—such as divestiture of regional channels like TNT Serie in Germany or licensing commitments for HBO Max content in France—could impact the pro forma financials of the transaction. Under the current agreement, Warner Bros. Discovery shareholders will receive $27.75 in cash per share and retain stakes in the remaining Discovery-focused businesses, including Eurosport and the global factual networks division. Completion of the divestiture will allow WBD to pay down its €18 billion of long-term debt by mid-2026, potentially restoring its investment-grade credit rating and unlocking up to $3 billion in annual free cash flow for distribution or strategic reinvestment.

European regulators are also evaluating the potential competitive effects involving Paramount’s unsolicited bid for Warner Bros. Discovery assets and the existing licensing agreements between WBD’s film studio and third-party streaming platforms. To secure clearance, the Commission may require WBD to grant multi-year output licensing contracts to rival streamers in Europe or to divest certain back-catalogue distribution rights. Such remedies could preserve market contestability but would reduce the incremental value Netflix expects to extract post-close and could influence the broader negotiating dynamics in global media mergers.

Warner Bros. Discovery and Netflix have committed to transparent cooperation with European authorities, submitting over 120,000 pages of documents and offering preliminary undertakings on content licensing. A final decision is expected by June 30, 2026; a conditional approval would allow the transaction to close in early Q3, pending required divestitures. Shareholders of WBD will vote on the deal at a special meeting in July, and failure to secure European approval—or a Phase II referral—would trigger a $1 billion reverse break fee payable by Netflix, adding further urgency to both companies’ regulatory strategies.