Netflix has reached a deal to acquire Warner Bros. Discovery in a historic combination, uniting the largest global paid streaming service with one of Hollywood’s oldest and most recognized studios.
Under the agreement announced this Friday (5), Warner Bros. shareholders will receive $27.75 per share in cash and Netflix stock. The total capital value of the operation is US$72 billion. The company’s value in the transaction is estimated at around US$82.7 billion.
Before closing, Warner Bros. will complete the already planned spin-off of the channel division, which includes networks such as CNN, TBS and TNT. According to Netflix, this split should be completed in the third quarter of 2026.
Netflix shares fell 2.3% in premarket trading in New York. Warner Bros. papers rose by around 1%.
The acquisition represents a relevant strategic change for Netflix, which had never carried out an operation of this size. The streaming pioneer became Hollywood’s most valuable company without its own studio, first licensing third-party content and then moving into original production.
With the purchase, Netflix takes control of HBO and its catalog, which includes series such as The Sopranos and The White Lotus. Warner Bros. assets they also include studios in Burbank, California, and a wide collection of films and TV productions, such as Harry Potter and Friends.
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“Together, we can deliver more of what audiences love and help define the next century of stories,” Netflix co-CEO Ted Sarandos said in the statement.
Netflix said it expects to maintain current Warner Bros. operations. and reinforce its strengths, including theatrical releases — a topic that generated concern in Hollywood. The company stated that the operation will allow it to “significantly expand” production capacity in the US and invest in original content, creating jobs and strengthening the entertainment sector.
Even so, the combination should generate “at least US$2 billion to US$3 billion” in annual savings starting in the third year, according to the statement.
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Warner Bros. put the company up for sale in October after receiving interest from several groups. In addition to Netflix, there were investments from Paramount Skydance Corp. and Comcast Corp. Warner Bros. began exclusive negotiations with Netflix on Thursday, according to Bloomberg.
The dispute was tense, with Paramount accusing Warner Bros. of conducting an unequal process that favored Netflix. Netflix agreed to pay Warner Bros. a termination fine of US$5.8 billion if the agreement is undone or does not receive regulatory approval.
The deal occurs at a time of contraction in traditional TV, while the public migrates to streaming — a market dominated by Netflix. In the most recent quarter, Warner Bros.’ channels division. there was a 23% drop in revenue, with cancellation of subscriptions and withdrawal of advertisers.
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Founded nearly three decades ago as a mail-order DVD rental service, Netflix ended 2024 with revenue of $39 billion. Warner Bros., created in the 1920s, also earned more than US$39 billion.
Iconic content from Warner Bros. gives Netflix a robust portfolio to sustain its edge over rivals like Walt Disney Co. and Paramount. The deal is likely to face antitrust scrutiny in the US and Europe and is already raising red flags.
California Republican Darrell Issa sent a note to American regulators opposing a possible transaction involving Netflix, citing consumer risks. Netflix argues that one of its biggest competitors is Alphabet Inc.’s YouTube.
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Netflix’s interest in Warner Bros. It also moved Hollywood. The company has historically avoided theatrical releases, releasing some original films only in limited releases.
Under the terms of the agreement, Warner Bros. shareholders they will receive $23.25 in cash and $4.50 in Netflix common stock. Completion is expected in 12 to 18 months.
Moelis & Co. acts as financial advisor to Netflix. Wells Fargo is an additional advisor and, along with BNP Paribas and HSBC Holdings, will provide $59 billion in debt financing, according to a regulatory filing.
Allen & Co., JPMorgan Chase & Co. and Evercore provide financial advice to Warner Bros. Discovery.
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