Netflix has agreed to acquire the film, television and streaming businesses of Warner Bros. Discovery in a deal valued at $72 billion (£54 billion).
This will be one of the largest takeovers in the history of the global entertainment industry.
In a joint statement released on Friday, Netflix and Warner Bros. Discovery said the agreement covers Warner Bros’ film and television studios, HBO, and the HBO Max streaming service, but excludes the company’s cable television networks such as CNN, TNT and Discovery, which will be placed into a separate company.
The transaction, which is subject to regulatory and shareholder approval, values Warner Bros. Discovery at $27.75 per share and gives the company a total enterprise value, including debt, of approximately $82.7 billion.
Netflix said it expects the deal to close within 12 to 18 months, following Warner Bros. Discovery’s planned separation of its Global Networks division into a new publicly traded firm, to be known as Discovery Global, which is expected to be completed in the third quarter of 2026.
Netflix emerged as the preferred bidder after a competitive process that included interest from Comcast and Paramount Skydance. Paramount had previously submitted a proposal to acquire the whole of Warner Bros. Discovery, including its cable networks, in October, but this offer was rejected before Warner Bros. placed parts of its business up for sale.
Under the agreed terms, Warner Bros. Discovery shareholders will receive $23.25 in cash and $4.501 in Netflix shares for each share they hold. Both companies said their boards had unanimously approved the transaction.
Netflix said it expects to achieve $2–3 billion in annual cost savings by the third year of ownership, mainly by removing overlapping technology and support operations.
Ted Sarandos, co-chief executive of Netflix, said the company was confident it would secure regulatory approval.
“We are highly confident we will receive the approvals we need, and we are moving full speed towards closing this deal,” Mr Sarandos said.
He described the acquisition as an opportunity to combine two large content portfolios.
“By combining the library of Warner Bros shows and films with Netflix series such as Stranger Things, we can give audiences more of what they love and help define the next century of storytelling,” he said.
Greg Peters, Netflix’s other co-chief executive, said the company had not taken a final decision on whether HBO Max would remain a separate service.
“We believe the HBO brand is important for consumers, but it is early to decide how we will shape the final offering,” he said.
David Zaslav, president and chief executive of Warner Bros. Discovery, welcomed the agreement.
“This deal brings together two of the greatest storytelling companies in the world,” Mr Zaslav said. “By coming together with Netflix, we will ensure people everywhere continue to enjoy these stories for generations.”
Netflix said Warner Bros films will continue to be released in cinemas and that the Warner Bros television studio will remain free to produce content for third-party platforms. Netflix also confirmed it will continue making exclusive content for its own streaming service.
The company added that the acquisition would expand its production capacity in the United States and increase long-term investment in original content.
However, Paolo Pescatore, founder of PP Foresight, described the deal as “a huge statement of intent” which shows Netflix’s ambition to dominate the global streaming industry. However, he warned that integrating such a large operation could prove difficult.
Tom Harrington, head of television at Enders Analysis, said the takeover could reshape the film industry.
“If this goes through, it will reorient Hollywood,” he said.
Mr Harrington also raised concerns about job losses and production cutbacks.
“There are likely to be big reductions in output, and the move will almost certainly face resistance from parts of the industry and from unions,” he said.
He warned that consumers could also pay more.
“Netflix would probably become more expensive, and the closure or downgrading of HBO Max could reduce choice for viewers.”
Danni Hewson, head of financial analysis at AJ Bell, said Netflix appeared to be sending a message to Hollywood by committing to theatrical releases.
“Netflix has offered reassurance by promising cinema releases, but the company’s growing market power will face intense scrutiny from regulators,” she said.
Note that Warner Bros. Discovery will retain its cable television operations under the planned Discovery Global spin-off, including CNN, TNT Sports in the United States, and Discovery’s free-to-air channels in Europe.
If approved, the agreement would place more than a century of film and television production under the ownership of a single streaming company.
