Core Insights - Netflix Inc. is pursuing a $72 billion acquisition of Warner Bros. Discovery Inc., which includes a significant breakup fee of $5.8 billion, indicating strong confidence in securing regulatory approval [1] - The breakup fee represents 8% of the deal's equity value, significantly higher than the average breakup fee of 2.4% in 2024, reflecting the competitive nature of the bidding process for Warner Bros. [2] - Warner Bros. would incur a $2.8 billion reverse breakup fee if its shareholders reject the deal, which would also be applicable if a rival offer is accepted [3] Breakup Fees in M&A History - The AOL/Time Warner deal had a breakup fee of approximately $5.4 billion, with a total deal value of $160 billion, representing 3.4% of the deal value [3][4] - Pfizer's proposed merger with Allergan had a potential breakup fee of $3.5 billion, but ultimately paid only $150 million due to regulatory changes, equating to less than 0.1% of the deal value [4] - AB InBev's acquisition of SAB Miller involved a $3 billion breakup fee, which was 2.9% of the $103 billion deal value, and was completed successfully [6]