Netflix announced on Friday that it has reached a definitive agreement to acquire Warner Bros. Discovery’s film studio and streaming service HBO Max, concluding a competitive bidding process that also included Paramount, Skydance, and Comcast.
The transaction, a combination of cash and stock, values Warner Bros. Discovery shares at $27.75 each, putting the equity value of the deal at approximately $72 billion and the total enterprise value at around $82.7 billion.
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A Strategic Move for Netflix
The acquisition marks a significant expansion for Netflix, the streaming giant that has reshaped the media industry over the past decade. With this deal, Netflix will add Warner Bros.’ historic film library—including The Wizard of Oz, the Harry Potter franchise, and the DC Comics universe—as well as HBO Max’s content, including The Sopranos and Game of Thrones.
“I know some of you are surprised that we’re making this acquisition, and I certainly understand why,” Netflix co-CEO Ted Sarandos said on an investor call. “Over the years, we have been known to be builders, not buyers. This is a rare opportunity that will help us achieve our mission to entertain the world and bring people together through great stories.”
Deal Structure and Timeline
As part of the agreement, Warner Bros. Discovery shareholders will receive $23.25 in cash and $4.50 in Netflix common stock for each share of WBD stock outstanding following the completion of the deal. Both companies’ boards have unanimously approved the transaction, which remains subject to regulatory approval and shareholder consent.
The acquisition is expected to close 12 to 18 months after Warner Bros. Discovery spins out its Discovery Global networks—including TNT and CNN—a process now anticipated in the third quarter of 2026.
Additionally, the companies have agreed to reverse breakup fees: Netflix would pay $5.8 billion if the deal is not approved, while Warner Bros. Discovery would pay $2.8 billion if it decides to pursue another merger.
Competitive Bidding and Regulatory Considerations
Netflix’s winning bid initially offered $27 per share, surpassing competing offers from Paramount and Comcast. Paramount’s final bid, submitted Thursday evening, was $30 per share in cash but included a $5 billion breakup fee contingent on regulatory approval.
Paramount also raised concerns about the fairness of the sale process, arguing that Warner Bros. Discovery had favored Netflix. The potential for antitrust scrutiny remains, given the combined global subscriber base: Netflix reported over 300 million streaming subscribers as of the end of 2024, while Warner Bros. Discovery had 128 million subscribers as of September 30.
Looking Ahead
The merger unites Netflix’s global streaming footprint with Warner Bros.’ storied content library, representing one of the largest media deals in recent history. The combined assets are expected to strengthen Netflix’s competitive position in the increasingly crowded streaming landscape while providing Warner Bros. Discovery the ability to focus on its linear TV networks and Discovery Global business.
Frequently Asked Questions
How much are Warner Bros. Discovery shareholders receiving?
Each WBD shareholder will receive $23.25 in cash plus $4.50 in Netflix stock for every share of WBD stock outstanding after the deal closes.
When is the deal expected to close?
The acquisition is expected to close 12 to 18 months after the planned spinoff of Warner Bros. Discovery’s TV networks, currently anticipated in Q3 2026.
Were there other companies competing for these assets?
Yes, Paramount Skydance and Comcast were also in contention. Netflix ultimately outbid competitors with its offer of $27.75 per share.
Will there be regulatory approval required?
Yes. The deal is subject to regulatory scrutiny and WBD shareholder approval. There is potential for antitrust review due to the scale of the combined streaming subscriber base.
How will the acquisition impact Netflix?
The acquisition significantly expands Netflix’s content library, adding Warner Bros.’ films and HBO Max series. It positions Netflix more strongly against competitors in the global streaming market.
Why is this acquisition significant?
This deal merges one of the largest streaming platforms with one of Hollywood’s most iconic studios, creating a formidable content powerhouse in the entertainment industry.
Conclusion
The Netflix–Warner Bros. Discovery deal represents a landmark moment in the entertainment industry, combining one of the world’s largest streaming platforms with a storied Hollywood studio and its iconic content library. For Netflix, the acquisition accelerates its growth strategy, strengthens its global content offering, and positions the company to better compete in an increasingly crowded streaming landscape.
