Netflix Agrees to Acquire Warner Bros Discovery Studios and Streaming Division for $72 Billion

According to Reuters, Netflix has agreed to purchase Warner Bros Discovery's television and film studios and streaming division for $72 billion. Netflix's offer of $27.75 per share surpasses Paramount's bid. The deal is expected to face significant antitrust scrutiny in Europe and the U.S. due to the combined dominance in streaming. The acquisition will enhance U.S. production, original content spending, and create more jobs. Warner Bros Discovery shares rose 3.2% to $25.33, Netflix shares dipped 0.2%, and Paramount fell 6.1%. Netflix will gain access to Warner Bros content including Game of Thrones, Harry Potter, and DC Comics franchises. The deal is expected to close after WBD spins off its global networks unit in Q3 2026. Netflix expects annual cost savings of $2-3 billion by the third year post-closing.

Deal details: Netflix (buyer) and Warner Bros Discovery (seller); $72 billion in stock, $82.7 billion including debt. WBD shareholders receive $23.25 in cash and $4.50 in Netflix stock per share. Assets acquired include TV/film studios and a vast content library. The deal will make Netflix a major Hollywood studio, combining leading streaming players, expanding Netflix's U.S. content reach, and enabling potential bundling with services like HBO Max. The acquisition also strengthens Netflix's gaming ambitions with WBD's successes like Hogwarts Legacy.

Netflix co-CEO Ted Sarandos commented, "I know some of you are surprised by this deal – and I certainly understand why. Over the years, we've been known as builders, not buyers... but this is a rare opportunity to help fulfill our mission to entertain the world and bring people together through great stories." Sarandos added the companies together "will help define the next century of storytelling." Co-CEO Greg Peters said the company could bundle streaming services or find ways to bring HBO Max to Netflix subscribers.

Financial impact: WBD shares rose 3.2% to $25.33, below the offer price. Netflix shares dropped 0.2%. Paramount fell 6.1%. The deal represents a 121.3% premium over WBD's closing price on September 10. Netflix shares are up 16% this year after surging over 80% in 2024.

Regulatory considerations: The deal is expected to face intense scrutiny in Europe and the U.S., creating the world's largest streaming service with over 130 million subscribers. There is anticipated resistance from Hollywood guilds and unions, and concerns for HBO's creative independence within Netflix. Cinema United sees an "unprecedented threat" to theaters worldwide. Former WarnerMedia CEO Jason Kilar said, "I can't think of a more effective way to reduce competition in Hollywood than selling WBD to Netflix." Netflix has pledged to release WBD films theatrically to address concerns.

Analyst reactions: Enders Analysis' Tom Harrington expects resistance from Hollywood and unions, warning HBO could be vulnerable within Netflix. Paolo Pescatore of PP Foresight said, "Given the current regulatory environment, this will raise concerns. The combined streaming giant will face intense scrutiny."

Bidding details: Netflix offered about $28 per share, outbidding Paramount Skydance. Paramount reportedly offered $30 per share, but that is unconfirmed. Some lawmakers argue the deal could harm consumers and Hollywood. Netflix is offering a $5.8 billion breakup fee to WBD; WBD would pay Netflix $2.8 billion if the deal collapses. Netflix aims to secure long-term rights to successful content, expand into gaming, and find new growth areas post-password sharing crackdown.