Netflix to buy Warner Bros Discovery’s studios, streaming unit for $72 billion
Dec 5 (Reuters) – Netflix agreed to buy Warner Bros Discovery’s TV and film studios and streaming division for $72 billion; The deal will hand control of one of Hollywood’s most valuable and oldest assets to the streaming pioneer who is disrupting the media industry.
The deal announced Friday follows a weeks-long bidding war in which Netflix took the lead with a bid of about $28 per share, eclipsing Paramount Skydance’s offer of about $24 for all of Warner Bros. Discovery, including cable TV assets planned for a spinoff.
Warner Bros. Discovery shares closed at $24.5 on Thursday, giving it a market value of $61 billion.
An agreement was made to reshape the media environment
Buying out the owner of major franchises like “Game of Thrones,” “DC Comics” and “Harry Potter” would further shift the balance of power in Hollywood in favor of the streaming giant that has established its dominance without major acquisitions or a vast content library, and would help efforts to stave off competition from Walt Disney and Ellison family-backed Paramount.
“Together we can give viewers more of what they love and help define the next century of storytelling,” Netflix co-CEO Ted Sarandos said in a statement. he said.
Strong antitrust review likely
Analysts have said Netflix is driven by a desire to lock in long-term rights to popular shows and movies and is relying less on outside studios as it expands into gaming and is looking for new growth paths after the success of its crackdown on password sharing.
But the deal will likely face strong antitrust scrutiny in Europe and the US as it would give ownership of the world’s largest streaming service, home to HBO Max, to a rival with around 130 million streaming subscribers.
Paramount, led by David Ellison, who started the bidding war with a series of unsolicited offers and has close ties to the Trump administration, questioned the sales process in a letter earlier this week claiming that Netflix was being treated favorably.
To ease concerns about market concentration, Netflix argued in deal talks that a possible combination of its streaming service with HBO Max would benefit consumers by lowering the cost of the bundled offering, Reuters reported on Tuesday.
According to media reports, the company also told Warner Bros. Discovery that it would continue to release the studio’s films theatrically in an effort to allay fears that the deal would eliminate another studio and major source of theatrical releases.
Cash and stock deal
Netflix shares lost nearly 3% in premarket trading, while Paramount lost 2.2%. The third suitor, Comcast, had not changed much.
Under the deal, each Warner Bros. Discovery shareholder will receive $23.25 in cash and approximately $4.50 in Netflix stock per share; That would value Warner at $27.75 per share, or about $72 billion in equity and $82.7 billion including debt.
The deal is expected to be completed after Warner Bros Discovery spins off its global network unit Discovery Global into a separate publicly traded company; This move is planned to be completed in the third quarter of 2026.
Netflix said it expects to achieve annual cost savings of at least $2 billion to $3 billion by the third year after the deal closes.
