Netflix and Warner Bros Discovery have entered into a definitive agreement that will see the streamer acquire WBD’s film and television studios, HBO Max and HBO.
The deal has been agreed at $27.75 per WBD share, with a total enterprise value of approximately $82.7 billion (equity value of $72.0 billion). The transaction is expected to close in 12-18 months.
The transaction is expected to close after the previously announced separation of WBD’s Global Networks division, Discovery Global, into a new publicly-traded company, which is now expected to be completed in Q3 2026.
Discovery Global will become the home of WBD’s entertainment, sports and news television brands around the world, including CNN, TNT Sports in the US, and Discovery, free-to-air channels across Europe, and digital products such as Discovery+ and Bleacher Report.
“Our mission has always been to entertain the world,” said Ted Sarandos, co-CEO of Netflix. “By combining Warner Bros’ incredible library of shows and movie, 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.”
“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,” added David Zaslav, president and CEO of Warner Bros. Discovery. “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 was in a three-horse race with Comcast and Paramount Skydance to acquire the company, with second-round bids submitted at the start of this week.
The biggest question surrounding a potential acquisition by Netflix is whether it would pass regulatory approval. Many in Hollywood are worried Netflix will wield too much power. According to Variety, a group of unnamed Hollywood ‘A-listers’ has sent a letter to Congress claiming the sale of WBD to Netflix would “effectively hold a noose around the theatrical marketplace” by reducing the amount of films in cinemas.
Netflix is believed to be trying to ease regulatory issues by arguing that the deal would lower the cost of streaming for consumers through bundling.
Warner Bros Discovery fired the starting gun on a potential sale or break-up in October when it announced a “review of strategic alternatives to maximise shareholder value”.
