Netflix announced on Friday that it has reached an agreement to acquire Warner Bros. Discovery’s (WBD) TV and film studios, along with the company’s streaming service HBO Max, in a landmark deal valued at $72 billion. The combination brings one of Hollywood’s oldest studios under the umbrella of the world’s largest streaming platform.
The deal concludes a competitive bidding process that also included Paramount Skydance and Comcast, both of which made offers for the company’s prized assets.
Deal Structure and Valuation
Under the terms of the agreement:
- Each WBD shareholder will receive $23.25 in cash and $4.50 in Netflix stock per share.
- The offer values WBD at $27.75 per share, representing an equity value of $72 billion and $82.7 billion including debt.
- The agreement includes a $5.8 billion reverse breakup fee payable by Netflix if regulators block the deal, and a $2.8 billion fee payable by WBD if WBD cancels the transaction.
The acquisition is expected to close 12–18 months after WBD completes the planned spinoff of its global TV networks division, Discovery Global, which includes channels such as TNT and CNN. This spinoff is now anticipated in Q3 2026.
What Netflix Gains
The transaction gives Netflix control of:
- Warner Bros. film studios, home to a century of iconic franchises, such as Harry Potter, The Wizard of Oz, and DC’s Batman and Superman.
- HBO Max has prestige titles, including The Sopranos, Game of Thrones, and Succession.
- WBD’s strong gaming assets, including the billion-dollar hit Hogwarts Legacy.
Netflix says the acquisition will expand its content library, strengthen U.S. production, and provide long-term growth opportunities across streaming and gaming.
Co-CEO Ted Sarandos described the move as a “rare opportunity,” adding that combining the companies “will help us entertain the world and bring people together through great stories.”
Competitive and Regulatory Concerns
The size and scope of the merger are expected to draw heavy antitrust scrutiny in the U.S. and Europe. Together, Netflix and WBD control a massive share of the streaming market, with:
- Netflix has surpassed 300 million subscribers (as of its last public report), and
- WBD reporting 128 million subscribers as of September.
Industry groups, including Cinema United, have already warned that the combination could reduce competition in theatrical releases. Some lawmakers also expressed concerns about potential impacts on consumers and creators.
Analysts expect unions, Hollywood stakeholders, and competing studios to raise objections during the regulatory review period.
Paramount’s Bidding Challenge
Paramount Skydance, led by David Ellison, was initially viewed as a frontrunner and submitted multiple bids for the entirety of WBD, including its TV networks. Its final reported offer was $30 per share, all cash, with a $5 billion breakup fee if regulators blocked the transaction.
Paramount later accused WBD of favoring Netflix and questioned the fairness of the sale process, claims WBD has not publicly commented on.
What Happens Next
The acquisition must now clear:
- Regulatory review
- WBD shareholder approval
- The successful spinoff of Discovery Global into a separate company
Netflix expects the combined entity to generate $2–3 billion in annual cost savings within three years after closing.
If approved, the deal would reshape the global entertainment landscape, bringing together the world’s largest streaming platform with one of Hollywood’s most storied and influential studios.
