Reuters reports that Microsoft and CEO Satya Nadella plan to buy Netflix for a total of $190 billion. The news agency explains:
With a market value of $1.8 trillion, which is 13 times Netflix’s as of early December, Microsoft can afford the acquisition. A premium of 30% would value Netflix at nearly $190 billion.
Reuters also reports that despite the high sums, a takeover would be easier to implement in Brussels and Washington than the current and open Activision Blizzard deal. According to the insights, both tech companies, Microsoft and Netflix, work very closely together and Microsoft President Brad Smith even sits on the Netflix board. The US trade and consumer protection authority Federal Trade Commission (FTC) has filed an antitrust lawsuit against the takeover of the computer and video game group Activision Blizzard by the software group Microsoft as part of the aforementioned Activision Blizzard deal. The approximately 69 billion US dollar (65.4 billion euro) acquisition would give Microsoft too much market power and harm competition in the business around game consoles such as the Xbox, the FTC said.
With the acquisition of Netflix (and Xbox Game Pass), Microsoft could make an all-in-one streaming service a reality. Netflix users have only recently been able to opt for an ad-supported subscription; CEO Reed Hastings even said at a conference that the streaming platform should have launched an ad-supported subscription years ago. For years, Netflix had resisted the idea of an ad-supported subscription.