In a move that will redefine the global entertainment landscape, streaming titan Netflix has agreed to purchase the television and film studios, along with the streaming division, of Warner Bros Discovery for a staggering $72 billion. This landmark agreement, finalised on Friday, hands Netflix control of some of Hollywood's most legendary franchises and sets the stage for an intensified battle with rivals like Disney and Paramount.
The Mega Deal: A New Era for Streaming
The agreement concludes a weeks-long, high-stakes bidding war. Netflix emerged victorious by offering nearly $28 per share, outbidding a rival offer of around $24 per share from David Ellison-led Paramount Skydance, which had sought the entirety of Warner Bros Discovery. Paramount, which initiated the unsolicited bids and has connections to former US President Donald Trump, had previously raised concerns about the sale process, alleging favourable treatment towards Netflix.
Under the terms, each Warner Bros Discovery shareholder will receive $23.25 in cash and approximately $4.50 in Netflix stock per share, valuing the transaction at $27.75 per share. Including debt, the total enterprise value reaches $82.7 billion. Netflix co-CEO Ted Sarandos, quoted by Reuters, stated, "Together, we can give audiences more of what they love and help define the next century of storytelling."
Strategic Gains and Immediate Market Reaction
This acquisition is a strategic masterstroke for Netflix, granting it ownership of iconic intellectual property including the "Game of Thrones" universe, the DC Comics superhero roster, and the magical world of "Harry Potter." Analysts believe Netflix aims to secure long-term rights to hit content, reducing reliance on external studios as it expands into gaming and seeks new growth avenues following its successful password-sharing crackdown.
The market's initial reaction, however, was cautious. Upon announcing the deal, Netflix shares fell nearly 3% in premarket trading. Warner Bros Discovery shares held steady at their Thursday closing price of $24.50, giving the company a market value of $61 billion. Paramount's stock also dipped by 2.2%.
Antitrust Hurdles and Future Integration
The deal is expected to face intense antitrust scrutiny from regulators in both the United States and Europe. The primary concern is that the world's largest streaming service would gain complete ownership of a major rival, HBO Max, which boasts nearly 130 million streaming subscribers. This consolidation could raise significant competition issues.
The transaction is slated to close after Warner Bros Discovery spins off its global networks unit, Discovery Global, into a separate listed company, a process targeted for completion in the third quarter of 2026. Netflix projects the acquisition will yield annual cost savings of $2 billion to $3 billion by the third year post-closure. This mega-deal not only reshapes the streaming hierarchy but also positions Netflix as an unparalleled content powerhouse for the digital age.
