NETFLIX has reached an agreement to purchase the film and streaming operations of Warner Bros Discovery in a landmark Hollywood deal valued at $72 billion (£54 billion).
The streaming giant emerged as the leading bidder ahead of rivals Comcast and Paramount Skydance, following a prolonged and competitive bidding process. Warner Bros’ portfolio includes major franchises such as Harry Potter and Game of Thrones, along with the streaming platform HBO Max.
The acquisition is expected to significantly reshape the US film and media landscape, although analysts have cautioned that it may face scrutiny from competition regulators.
Ted Sarandos, Netflix’s co-chief executive, said the merger would allow the combined company to “give audiences more of what they love and help define the next century of storytelling” by pairing Warner Bros’ vast library—including classics such as Casablanca—with Netflix’s popular series, such as Friends.
David Zaslav, president and CEO of Warner Bros, added that the agreement would unite “two of the greatest storytelling companies in the world.” He said: “By coming together with Netflix, we will ensure people everywhere will continue to enjoy the world’s most resonant stories for generations to come.”
The deal, structured as a combination of cash and stock, values Warner Bros shares at $27.75 each. The total enterprise value, which includes debt alongside equity, is approximately $82.7 billion, with the cash price alone amounting to $72 billion. Both companies’ boards have unanimously approved the transaction.
The acquisition will enable Netflix to expand its studio production capabilities and boost investment in original content. Completion is expected after Warner Bros finalises plans to split its streaming and studio operations from its global networks division—home to cable channels such as CNN, European free-to-air channels, and sports brands—into two publicly traded companies next year.
Industry experts warn of challenges ahead
Paolo Pescatore, founder of PP Foresight, described the sale as “a huge statement of intent and underlines Netflix aspirations to be a global leader in the new world order of streaming.” He cautioned, however, that while the move is strategically logical for Warner Bros, it poses potential challenges for Netflix.
“This is uncharted waters and previous big media acquisitions have been poorly executed. If and once approved, Netflix will need to have a razor-sharp focus on integration and execution,” he said.
Although the deal covers only part of Warner Bros’ operations, rival Paramount had submitted a bid in October to acquire the entire company, including its cable networks. Warner Bros rejected this offer before putting the business up for sale.
Ahead of Friday’s announcement, Emma Wall, chief investment strategist at Hargreaves Lansdown, suggested US competition authorities were likely to scrutinise the deal closely. “This will create a global mega power in broadcast entertainment which the regulator will want to look at,” she said.
Tom Harrington, head of television at Enders Analysis, highlighted the potential impact on Hollywood, cinema, and content output. “Were it to go through it would reorient Hollywood, with a streamer acquiring a business much of which it is existentially the antithesis of—Netflix has always had some limited use for the cinema but generally its offering undermines it,” he said.
Mr Harrington warned that a merged entity could see “big reductions” in television and film output, sparking resistance from parts of Hollywood and relevant unions. He added: “HBO, the creative jewel, would be terribly exposed within Netflix, although it has survived difficult owners for much of its existence.”
For consumers, the merger could mean higher costs. “Netflix would get more expensive and, even though HBO Max would be shuttered or become non-essential, the greater penetration of Netflix households would likely lead to an increase in overall subscription revenues,” Mr Harrington said.
