Netflix has agreed to acquire Warner Bros Discovery’s television and film studios, along with its streaming division, for $72 billion, in a transaction that would place one of Hollywood’s most valuable and historic entertainment portfolios under the control of the world’s largest streaming company.
The agreement, announced on Friday, follows a weeks-long bidding war in which Netflix emerged as the top bidder with an offer close to $28 per share. That offer surpassed Paramount Skydance’s nearly $24 bid for Warner Bros Discovery’s full business, including the company’s legacy cable television assets that are set to be spun off.
Warner Bros Discovery shares closed at $24.50 on Thursday, giving the company a market value of approximately $61 billion prior to the announcement.
A Deal That Could Reshape the Media Landscape
Netflix’s acquisition gives it control of some of the most recognizable intellectual property in entertainment, including franchises such as Game of Thrones, DC Comics and Harry Potter. Reuters analysts say the transaction could dramatically shift the balance of power in Hollywood in favor of Netflix, which built its dominance in entertainment without relying on large-scale acquisitions or an extensive studio-owned catalog.
The move also strengthens Netflix’s position against major competitors like Walt Disney and Paramount, which have increasingly leaned on known franchises to attract and retain subscribers.
Netflix co-CEO Ted Sarandos said in a statement that the deal was about shaping the future of entertainment:
“Together, we can give audiences more of what they love and help define the next century of storytelling.”
Antitrust Scrutiny Expected in Europe and the United States
The acquisition is expected to face close regulatory examination on both sides of the Atlantic. Analysts have warned that the deal will likely be subject to intense antitrust review due to the concentration of power it would create in streaming and entertainment distribution.
The world’s biggest streaming company would also assume control of HBO Max, a major rival platform that currently counts nearly 130 million subscribers. European and U.S. authorities are expected to analyze whether the transaction would unfairly reduce competition in the digital content marketplace.
Reuters also reported that Paramount, led by David Ellison, questioned the sale process in a formal letter earlier this week, alleging that Netflix received preferential treatment during negotiations.
Netflix Moves to Ease Competition Concerns
During deal negotiations, Netflix told Warner Bros Discovery that merging its streaming business with HBO Max would benefit consumers by reducing the cost of bundled services, according to Reuters.
The company also indicated it would continue releasing Warner Bros films in theaters rather than pulling back from traditional cinema distribution. Media reports cited by Reuters say the intent was to counter concerns that Netflix might remove another major supplier of theatrical releases from the market entirely.
Cash-and-Stock Deal and Timeline for Completion
Under the terms of the agreement, Warner Bros. Discovery shareholders will receive $23.25 in cash and approximately $4.50 in Netflix stock per share. The transaction values Warner Bros Discovery at $27.75 per share, representing an equity value of about $72 billion and a total valuation of approximately $82.7 billion, including debt.
The deal will close only after Warner Bros Discovery completes its planned spin-off of its global cable networks business, Discovery Global, into a separate publicly listed company. That transaction is expected to be finalized in the third quarter of 2026.
Cost Savings and Market Reaction
Netflix said it expects at least $2 billion to $3 billion in annual cost savings by the third year after the deal is completed.
Following the announcement, Netflix shares fell nearly 3% in premarket trading. Paramount shares declined 2.2%, while Comcast, which was also involved in bidding, showed little movement in early trading.
A Defining Moment for Streaming and Studio Power
The acquisition marks the most significant transaction in Netflix’s history and illustrates how the streaming wars are entering a new phase defined by consolidation rather than expansion alone.
By taking control of Warner Bros Discovery’s content assets, Netflix stands to reshape the future of entertainment production and distribution—subject to the outcome of regulatory approvals that could determine how far streaming dominance is allowed to go.
Source: Reuters — Reporting by Aditya Soni and Harshita Mary Varghese in Bengaluru; Editing by Arun Koyyur
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