Netflix has announced an $82.7 billion deal to acquire Warner Bros. Discovery, a move that will unite the world’s largest paid streaming platform with one of Hollywood’s most historic studios in what analysts are calling one of the industry’s most consequential mergers.
Under the terms of the agreement unveiled on Friday, Warner Bros. shareholders will receive $27.75 per share in a mix of cash and Netflix stock, valuing the equity portion of the transaction at $72 billion.
Before the merger closes, Warner Bros. will finalise the spinoff of its networks division, home to CNN, TNT and TBS, now slated for completion in the third quarter of 2026.
The acquisition marks a major strategic shift for Netflix. The company, which began nearly 30 years ago as a DVD-by-mail service, built its global dominance without owning a major studio or library.
Over time it relied on licensed titles before shifting heavily into originals.
With this deal, Netflix gains ownership of HBO, its library of acclaimed series such as The Sopranos and The White Lotus, the Warner Bros. film catalogue including Harry Potter and Friends, and the company’s vast production facilities in Burbank, California.
“Together, we can give audiences more of what they love and help define the next century of storytelling,” Netflix co-Chief Executive Officer Ted Sarandos said, noting that the partnership strengthens Netflix’s ability to scale global content production.
The company said it will maintain Warner Bros.’ current operations and preserve its theatrical release model, seeking to expand US production capacity while supporting jobs across the entertainment sector.
The deal is projected to generate *$2 billion to $3 billion* in annual cost savings by the third year, Netflix said in its statement.
Warner Bros. put itself on the market in October after receiving overtures from multiple companies. Paramount Skydance Corp. and Comcast Corp. also pursued the studio, with Paramount later accusing Warner Bros. of favouring Netflix in the bidding process. Netflix has agreed to pay a $5.8 billion termination fee if the merger collapses or fails to secure regulatory approval.
The planned combination arrives at a time when traditional television is contracting sharply. Warner Bros.’ cable division reported a 23% revenue decline in its most recent quarter, reflecting subscriber losses and shifting advertiser spending. Meanwhile, Netflix ended 2024 with $39 billion in revenue, roughly matching Warner Bros.’ annual sales despite their very different origins.
Regulatory scrutiny is expected in both the US and Europe. US lawmaker, Darrell Issa has already warned regulators that the merger could harm consumers, while Netflix argues that platforms like YouTube pose some of its toughest competition.
If approved, the deal is set to close within 12 to 18 months. Netflix’s advisors on the transaction include Moelis & Co. and Wells Fargo, while Warner Bros. is being advised by Allen & Co., JPMorgan Chase & Co. and Evercore.
