Exclusive / Netflix wades into the M&A game

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It failed in a bid for Warner Bros. Discovery. Then, it bowed out of its pursuit of Roku, according to people involved in the sale process. Netflix is increasingly showing up in the marketplace for giant deals, marking a territory for the company that historically said it prefers to build, not buy its growth.

Netflix and Roku did have talks about a potential combination, according to people briefed on the conversations. Netflix engaged in preliminary due diligence as part of the sale process that Qatalyst was running for Roku, one of those people said. Netflix chose to not pursue a deal, those people said.

A Netflix spokesperson declined to comment, but provided a statement after the story was published: “Netflix did not make a bid for Roku.”

It is one of a number of media companies interested in buying Lionsgate Studios, although Netflix — like everyone else — has not put in a formal indication of interest, according to a person familiar with the matter. Netflix has described its approach to M&A as “disciplined.” It demonstrated that with Warner Bros., to Hollywood’s dismay, and again at Roku.

Spokespeople for Roku and Lionsgate declined to comment. Fox offered $22 billion in a mix of cash-and-stock for Roku. But there are some signs that Netflix’s offer might have been a challenging deal.

A Netflix-Roku tie up would have been thornier, antitrust-wise, than the combination of Roku and Fox, some of those people said. Netflix produces original content and competes with the biggest players on Roku’s platform, such as Disney’s streaming services and Comcast’s Peacock. The Roku board was also intently focused on maximizing value, another person familiar with the matter said, suggesting that Netflix came up short of the $160-per-share bid that Fox offered.

Its pursuit of Warner Bros. Discovery whetted its appetite for large M&A, co-CEO Ted Sarandos said. “We really built our M&A muscle” pursuing Warner Bros., Sarandos said on an April earnings call. “We’ve learned so much about deal execution, about early integration.”

In this article:

The Scoop

Rohan’s view

Notable

Rohan’s view

We wrote in February that Netflix walked away from its bid for Warner Bros. “especially battered.” Battered it may have been, but it is certainly undaunted. The streaming giant is understandably unwilling to subject itself to the kind of public scrutiny it did with Warner. But it is a time for consolidation and there is no shortage of assets to pursue. One thing is certain: At both Warner Bros. Discovery and Roku, Netflix has shown fanatical focus on not overpaying. Roku may have been too rich for Netflix’s blood, but Lionsgate — or another asset — may not be.

Correction: A previous version of this story misstated the consideration Fox paid for Roku. The story was also updated to add Netflix’s post-publication comment.

Notable

Media M&A has been on a consistent uptick since 2024, Alixpartners data shows.