Netflix has reached an agreement to acquire the film and streaming operations of Warner Bros Discovery for $72 billion (£54 billion), marking one of the most consequential deals in modern Hollywood.
The company emerged as the winning bidder after a prolonged contest involving Comcast and Paramount Skydance, securing the assets following weeks of negotiations.
Warner Bros’ portfolio includes major global franchises such as Harry Potter and Game of Thrones, along with the streaming platform HBO Max.
If approved, the takeover will create a new entertainment powerhouse, though the deal still faces scrutiny from competition regulators in the US and abroad.
Several industry groups, including the Writers Guild of America, have already criticised the planned merger, arguing it could create harmful conditions for workers and consumers.
Netflix co-chief executive Ted Sarandos said the company was “highly confident” regulators would approve the purchase, adding it was moving “full speed” towards completing the transaction.
He said that uniting Warner Bros’ catalogue with Netflix hits like Stranger Things meant “we can give audiences more of what they love and help define the next century of storytelling”.
Sarandos added: “Warner Bros have defined the last century of entertainment, and together we can define the next one,” underscoring the cultural significance of the combined companies.
Asked whether HBO would continue as a standalone service, Netflix co-chief executive Greg Peters said the brand still held strong consumer value, but added: “We think it’s quite early to get into the specifics of how we’re going to tailor this offering for consumers.”
Netflix estimates it will generate $2 billion to $3 billion in cost savings by consolidating overlapping support and technology divisions across both businesses.
The company confirmed that Warner Bros films would continue to be released in cinemas, and its television studio would still be permitted to produce content for outside partners. Netflix will continue developing exclusive programming for its own platform.
Calling it a “big day” for both sides, Sarandos acknowledged that the announcement may have surprised some investors, but described the acquisition as a “rare opportunity” to secure Netflix’s growth “for decades to come”.
Warner Bros president and chief executive David Zaslav said the deal would unite “two of the greatest storytelling companies in the world”.
He added: “By coming together with Netflix, we will ensure people everywhere will continue to enjoy the world’s most resonant stories for generations to come.”
The cash-and-stock agreement values Warner Bros at $27.75 per share, giving the company an enterprise value of roughly $82.7 billion once debt is included. Its total equity value stands at $72 billion.
Both companies’ boards of directors unanimously voted to approve the deal.
Not everyone in Hollywood welcomed the news. The Writers Guild of America’s East and West branches issued a joint statement declaring “this merger must be blocked”.
According to the guild, “The outcome would eliminate jobs, push down wages, worsen conditions for all entertainment workers, raise prices for consumers, and reduce the volume and diversity of content for all viewers.”
Michael O’Leary, chief executive of Cinema United, went further, calling the merger “an unprecedented threat” to cinemas worldwide.
He warned: “The negative impact of this acquisition will impact theatres from the biggest circuits to one-screen independents in small towns in the United States and around the world.”
Netflix will move to complete the transaction once Warner Bros finalises plans to separate its streaming-and-studios arm from its global networks division next year.
The networks division will be rebranded as Discovery Global and include US cable channels such as CNN and TNT Sports, as well as Discovery and free-to-air networks across Europe.
However, TNT Sports International will remain under the streaming-and-studios business that Netflix is acquiring.
Hollywood Shake-Up
Analysts said the move signals a dramatic reshaping of the streaming landscape. Paolo Pescatore of PP Foresight described the sale as “a huge statement of intent and underlines Netflix aspirations to be a global leader in the new world order of streaming”.
But he cautioned that while the “surprising move” may benefit Warner Bros strategically, integrating the businesses could “provide a headache for Netflix” due to the scale of the merger.
Paramount, one of Netflix’s rivals, had previously made an offer to buy the whole of Warner Bros — including its cable networks — in October. The company rejected the bid before putting itself up for sale.
Ahead of the announcement, Tom Harrington of Enders Analysis said regulatory approval remained uncertain, but noted the impact of the deal would be enormous if it passed.
“Were it to go through it would reorient Hollywood,” he said.
Harrington predicted “big reductions” in film and TV production if the companies combined, likely triggering strong resistance from industry unions and creative groups.
For consumers, he said the effect would almost certainly be financial.
“Netflix would get more expensive and even though HBO Max would be shuttered/become non-essential, the greater penetration of Netflix households would likely mean an increase in total overall subscription revenues.”
Danni Hewson, head of financial analysis at AJ Bell, said Netflix had “offered an olive branch” to Hollywood by promising to keep releasing Warner Bros films theatrically.
She added that “If this deal can clear those significant regulatory hurdles quickly there are likely to be considerable cost savings to be made.”
“How much of those savings get passed to streaming platform subscribers or whether Netflix will be seen to have too much pricing power is one of the areas that will face a huge amount of scrutiny in the coming months.”
