Netflix Agrees $72bn Takeover Of Warner Bros Film, Streaming Operations

Netflix has agreed to acquire the film and streaming businesses of Warner Bros Discovery in a landmark $72bn (£54bn) deal that is set to reshape the global entertainment industry.

The streaming giant beat competition from rivals including Comcast and Paramount Skydance after a prolonged bidding process. Warner Bros owns some of Hollywood’s most valuable franchises, including Harry Potter and Game of Thrones, as well as the HBO Max streaming service.

While the takeover is expected to create a new powerhouse in film and television, it remains subject to regulatory approval from competition authorities.

Netflix co-chief executive Ted Sarandos said the company was “highly confident” the deal would pass regulatory scrutiny and revealed that Netflix was moving “full speed” towards completion.

He said bringing together Warner Bros’ vast library with Netflix originals such as Stranger Things would allow the company to offer audiences more choice and shape the future of entertainment.

“Warner Bros have defined the last century of entertainment, and together we can define the next one,” he said.

On the future of HBO Max, Netflix co-chief executive Greg Peters said the company recognised the value of the HBO brand but noted it was too early to outline detailed plans for how the services might be combined.

Netflix expects to unlock $2bn to $3bn in cost savings, largely through cutting overlaps in technology and support functions. It confirmed that Warner Bros films will continue to be released in cinemas and that its television studio will still be allowed to produce content for third parties. Netflix, however, will continue prioritising exclusive content for its own platform.

Describing the deal as a “big day” for both firms, Mr Sarandos admitted the acquisition may have surprised some investors but called it a rare long-term opportunity to strengthen Netflix’s position for decades to come.

Warner Bros chief executive David Zaslav said the agreement would unite “two of the greatest storytelling companies in the world”.

“By coming together with Netflix, we will ensure people everywhere will continue to enjoy the world’s most resonant stories for generations to come,” he said.

Under the terms of the cash-and-stock agreement, Warner Bros shareholders will receive $27.75 per share. The total enterprise value of the deal, including debt, is estimated at about $82.7bn, with the equity portion valued at $72bn. Both companies’ boards have unanimously approved the transaction.

The takeover is expected to significantly boost Netflix’s studio production capacity and expand its investment in original programming. Completion of the deal is planned after Warner Bros finalises its previously announced split of its streaming and studios business from its global networks division next year.

The global networks arm will become Discovery Global and retain cable brands such as CNN and TNT Sports in the US, alongside European Discovery and free-to-air channels.

However, TNT Sports International will remain with the division being sold to Netflix.

Paramount had previously attempted to acquire the entire Warner Bros group, including its cable networks, last October, but the bid was rejected before the company was put up for sale.