Streaming giant Netflix announced on Friday that it will acquire film and television powerhouse Warner Bros. Discovery in a deal valued at nearly $83 billion.
The acquisition grants Netflix access to Warner Bros.’ extensive film library as well as the highly regarded streaming platform HBO Max.
Warner Bros., one of Hollywood’s oldest studios, is behind timeless classics such as “Casablanca” and “Citizen Kane,” along with more recent global hits including “The Sopranos,” “Game of Thrones,” and the “Harry Potter” franchise.
“Together, we can give audiences more of what they love and help define the next century of storytelling,” said Ted Sarandos, Netflix co-CEO. The streaming service, known for smash hits like “Stranger Things,” “KPop Demon Hunters,” and “Squid Games,” has been seeking to bolster its content library amid rising competition.
Until now, the largest deal of its kind was Disney’s $71 billion acquisition of Fox in 2019.
The new transaction values Warner Bros. Discovery at $27.75 per share, representing an equity value of about $72 billion and an enterprise value — including debt — of roughly $82.7 billion. Warner Bros. Discovery shares closed at $24.54 on Thursday on the Nasdaq.
“Today’s announcement combines two of the greatest storytelling companies in the world,” said David Zaslav, President and CEO of Warner Bros. Discovery.
Both companies’ boards unanimously approved the merger, which is expected to close within 12 to 18 months.
Kathleen Brooks, research director at XTB, said the acquisition signals Netflix’s ambition “to dominate Hollywood.” She warned, however, of potential concerns about the size of the new entity and fears it could create “a colossus in the TV and movie business.”
The deal is also expected to face significant antitrust scrutiny in the United States and other jurisdictions. Analysts say Netflix — which has never attempted a takeover of this scale — may encounter political and regulatory hurdles.
Warner Bros. Discovery officially put itself up for sale in October after multiple unsolicited offers, abandoning plans to split into two separate companies.
The studio was previously courted by Paramount, now owned by the billionaire Ellison family, as well as Comcast, owner of NBCUniversal.
According to Bloomberg, Netflix joined Paramount Skydance and Comcast in a second round of auction negotiations conducted over the U.S. Thanksgiving holiday. The company has reportedly begun arranging a multi-tens-of-billions bridge loan to finance the acquisition.
Hollywood insiders have expressed concern over Netflix gaining control of a major studio. Some believe Netflix’s preference for streaming-first releases could reduce theatrical opportunities for major films.
Before the deal was formally announced, “Titanic” director James Cameron warned that a takeover of Warner Bros. by Netflix would be “a disaster.”