Global streaming giant Netflix has agreed to acquire Warner Bros Discovery (WBD) film production studio, television production studio, and HBO Max streaming service for a price of $72 billion. This deal marks the largest acquisition in Netflix’s history and is expected to reshape the global entertainment and media industry.
The cash and stock transaction, announced on Friday, values the enterprise at approximately $82.7 billion including debt, with the stock component valued at around $72 billion.
Netflix’s offer of $27.75 per share surpassed the nearly $24 per share bid made by Paramount Skydance, backed by the Ellison family. Paramount had attempted to acquire the entire WBD, including its cable networks.
Under the agreement, the transaction will be completed after WBD separates its film studio, television production studio, and streaming assets from its global cable network business such as CNN, TNT, and TBS.
Netflix Co-CEO Ted Sarandos called the opportunity to acquire Warner Bros a “once-in-a-lifetime opportunity.” The move aims to expand content library, increase production capabilities, and address competition.
Specifically, incorporating Warner Bros’ vast film and television library, as well as HBO Max’s premium content like “Game of Thrones,” “Harry Potter,” and DC Comics, into its platform will solidify subscriber base, significantly expand U.S. production capabilities, reduce reliance on external studios, and help the company explore new growth avenues. This acquisition will also enable Netflix to fend off competition from industry giants like Walt Disney and Paramount.
The merger of the world’s largest streaming service with its major competitor HBO Max is expected to face rigorous antitrust scrutiny from regulatory authorities in Europe and the United States.
Paramount previously publicly questioned Netflix’s bidding process and warned that the transaction may “never be completed” due to its dominant market position.
A senior government official told CNBC on Friday morning that he has “strong doubts” about this transaction.
The New York Post reported on Thursday that Paramount Skydance CEO David Ellison met with Trump administration officials and key lawmakers in Washington, D.C., on Wednesday to “emphasize his opposition to Warner Bros Discovery potentially choosing Netflix as its merger partner.”
This deal also poses a threat to global movie theaters. To alleviate concerns, Netflix has promised WBD to continue retaining the studio’s theatrical distribution business.
Warner Bros Discovery has seen significant success in the gaming sector, particularly with hits like “Hogwarts Legacy.” This acquisition will further enhance Netflix’s efforts in the gaming space.
Netflix expects to generate annual cost savings of at least $2 billion to $3 billion in the third year after the completion of the transaction.