Netflix has struck a landmark $72bn (£54bn) deal to purchase the film and streaming operations of Warner Bros Discovery, beating out competitors Comcast and Paramount Skydance after a lengthy bidding process.
The acquisition hands Netflix major franchises such as Harry Potter, Game of Thrones, and the HBO Max streaming platform. The agreement, which still requires regulatory approval, is set to reshape Hollywood by creating a powerful new entertainment giant.
Netflix CEO Ted Sarandos said the company was “highly confident” regulators would sign off, adding that combining Warner Bros’ extensive library with Netflix’s hits like Stranger Things would help “define the next century of storytelling.”
His fellow co-CEO Greg Peters said the HBO brand would remain important, though details of how the services will be integrated are still being developed.
Netflix expects to save between $2bn and $3bn, largely by cutting overlapping technology and support roles. Warner Bros films will continue to premiere in cinemas, and its TV studio will still be allowed to produce shows for third parties. Netflix will continue making exclusive content for its own platform.
Warner Bros CEO David Zaslav called the deal a union of “two of the greatest storytelling companies in the world.”
The transaction values Warner Bros at an enterprise value of about $82.7bn, with shareholders receiving $27.75 per share. Both companies’ boards approved the deal unanimously.
However, the merger has drawn criticism from parts of the cinema industry. Michael O’Leary, head of Cinema United, warned it poses a significant threat to theatres worldwide.
The deal will close after Warner Bros completes a planned split between its streaming/studio operations and its global networks division, which will become Discovery Global. TNT Sports International will remain with the units being sold to Netflix.
Industry analysts say the move signals Netflix’s ambition to dominate global streaming, but warn it could be challenging to merge two huge media businesses. The takeover is also expected to prompt concerns about consumer pricing, reductions in film and TV output, and wider consequences for Hollywood.