LOS ANGELES—Netflix announced it has entered into an agreement to acquire the assets of Warner Bros. for $82.7 billion.
The transaction—which includes the acquisition of WB’s film and TV studios, HBO Max and HBO—is expected to close after the previously announced separation of Warner Bros. Discovery’s Global Networks division, Discovery Global, into a new, publicly traded company, which is now expected to be completed in Q3 2026. Netflix said the acquisition of Warner Bros. is expected to close in “12-18 months.”
'Leveraging Strengths'
The acquisition will bring such classic movies as “The Wizard of Oz,” and the lucrative DC Universe franchise, as well as TV shows such as “The Big Bang Theory,” “The Sopranos“ and “Game of Thrones,” to Netflix’s lineup.
In June, WBD announced plans to split the company into two, saying that the separation "will invigorate each company by enabling them to leverage their strengths and specific financial profiles."
In October, WBD made public its plans to put the division up for sale. “It’s no surprise that the significant value of our portfolio is receiving increased recognition by others in the market,“ WBD CEO David Zaslav said. At that time potential suitors for all or part of the company had included Paramount, Comcast NBCUniversal and some major tech companies such as Amazon and Apple.
Ted Sarandos, co-CEO of Netflix hailed the agreement.
“Our mission has always been to entertain the world,” sSarandos said. “By combining Warner Bros.’ incredible library of shows and movies—from timeless classics like ‘Casablanca’ and ‘Citizen Kane’ to modern favorites like Harry Potter and Friends—with our culture-defining titles like ‘Stranger Things,’ ‘KPop Demon Hunters’ and ‘Squid Game,’ we'll be able to do that even better. Together, we can give audiences more of what they love and help define the next century of storytelling.”
“This acquisition will improve our offering and accelerate our business for decades to come,” continued Greg Peters, co-CEO of Netflix. “Warner Bros. has helped define entertainment for more than a century and continues to do so with phenomenal creative executives and production capabilities. With our global reach and proven business model, we can introduce a broader audience to the worlds they create—giving our members more options, attracting more fans to our best-in-class streaming service, strengthening the entire entertainment industry and creating more value for shareholders.”
Added Zaslav: “Today’s announcement combines two of the greatest storytelling companies in the world to bring to even more people the entertainment they love to watch the most. “For more than a century, Warner Bros. has thrilled audiences, captured the world’s attention, and shaped our culture. By coming together with Netflix, we will ensure people everywhere will continue to enjoy the world’s most resonant stories for generations to come.”
Netflix said it expects “to maintain Warner Bros.’ current operations and build on its strengths, including theatrical releases for films,” and that adding “deep film and TV libraries” to its library,” will allow the streamer to “optimize its plans for consumers, enhancing viewing options and expanding access to content.”
Whether that leads to subscription hikes is yet to be determined.
Netflix says the merger will lead to “a stronger entertainment industry… more opportunities for the creative community… and more value for shareholders," but many in Hollywood are skeptical.
Yesterday, Variety reported that an anonymous collective identifying themselves only as “concerned feature film producers” sent an open letter to members of both parties in Congress, claiming that the acquisition could “destroy” the theatrical film marketplace by altering the amount of time Warner Bros. films would be shown in theaters before streaming on a Netflix-HBO Max streaming platform.
The group claimed that the Netflix-WBD combination would wield too much market influence and “effectively hold a noose around the theatrical marketplace.”
Likewise, former WarnerMedia CEO Jason Kilar tweeted on X yesterday that the deal could decimate competition. “If I was tasked with doing so, I could not think of a more effective way to reduce competition in Hollywood than selling WBD to Netflix,” he posted.
Transaction Details and Timing
Under the terms of the agreement, each WBD shareholder will receive $23.25 in cash and $4.501 in shares of Netflix common stock for each share of WBD common stock outstanding at the closing of the transaction. The transaction values Warner Bros. Discovery at $27.75 per share, implying a total equity value of approximately $72.0 billion and an enterprise value of about $82.7 billion
The newly separated publicly traded company holding the Global Networks division, Discovery Global, will include the company’s internatiional pay TV properties such as CNN, TNT Sports in the U.S., and Discovery, free-to-air channels across Europe, and digital products such as Discovery+ and Bleacher Report.
The transaction was unanimously approved by the boards of both Netflix and WBD, the companies said. The deal is subject to the separation of Discovery Global and to required regulatory approvals, the approval of WBD shareholders and other customary closing conditions.
