Netflix to Acquire Warner Bros for $72 Billion, Creating New Entertainment Giant

Netflix has agreed to acquire Warner Bros Discovery’s film and streaming businesses for $72 billion, outbidding rivals like Comcast and Paramount. The deal, which includes franchises such as Harry Potter and Game of Thrones and HBO Max, aims to combine content libraries and create a major entertainment powerhouse. Regulatory approval is still required, and the merger could affect cinemas, content production, and subscription pricing.

Netflix has agreed to acquire the film and streaming businesses of Warner Bros Discovery in a landmark deal valued at $72 billion (£54 billion), marking one of the largest transactions in Hollywood history. After a competitive bidding process that included rivals such as Comcast and Paramount Skydance, Netflix emerged as the successful bidder for Warner Bros, which owns globally recognized franchises including Harry Potter and Game of Thrones, as well as the streaming service HBO Max. The acquisition is expected to create a formidable new player in the entertainment industry, although it will require approval from competition regulators before it can be finalized.

Netflix co-chief executive Ted Sarandos expressed confidence that the deal would receive the necessary regulatory approval, stating that the company was moving forward "full speed" to complete the transaction. He emphasized the potential creative opportunities of combining Warner Bros’ extensive library of shows and films with Netflix’s original series, such as Stranger Things, suggesting that this integration could shape the next century of storytelling. “Warner Bros have defined the last century of entertainment, and together we can define the next one,” Sarandos added.

When asked about the future of HBO as a standalone streaming service, Netflix co-chief executive Greg Peters acknowledged the brand’s importance to consumers but noted that it was too early to disclose specific plans for how the company would tailor its offering. Netflix anticipates finding $2 billion to $3 billion in cost savings, primarily by eliminating redundancies in support and technology functions between the two businesses. The company confirmed that Warner Bros films would continue to debut in cinemas, while the Warner Bros television studio would maintain the ability to produce content for third parties. Simultaneously, Netflix will continue to produce exclusive content for its platform.

Sarandos described the acquisition as a "big day" for both companies and acknowledged that the move might surprise some shareholders, framing it as a “rare opportunity” to position Netflix for long-term success. Warner Bros president and CEO David Zaslav echoed this sentiment, stating that the agreement unites “two of the greatest storytelling companies in the world” and ensures audiences everywhere will continue to enjoy compelling stories for generations.

The deal, which combines cash and stock, values each Warner Bros share at $27.75, resulting in an enterprise value of approximately $82.7 billion when factoring in the company’s debts. The equity value, or cash price, of the transaction is $72 billion. Both companies’ boards of directors approved the agreement unanimously.

Industry experts and stakeholders have raised concerns about the implications of the merger. Michael O’Leary, CEO of trade organization Cinema United, warned that the combination could pose “an unprecedented threat” to the global cinema business, potentially affecting theaters ranging from large chains to single-screen independent cinemas across the United States and internationally.

Netflix plans to finalize the takeover after Warner Bros completes its previously announced plan to split its streaming and studios division from its global networks division, which is scheduled to become Discovery Global next year. Discovery Global will encompass cable channels such as CNN and TNT Sports in the U.S., as well as Discovery and free-to-air channels in Europe. TNT Sports International will remain with the streaming and studios division being sold to Netflix.

Paolo Pescatore, founder of PP Foresight, described the sale as “a huge statement of intent” that underscores Netflix’s ambition to lead the global streaming industry. However, he cautioned that integrating the two companies could pose challenges for Netflix given the scale of the acquisition. While Netflix is acquiring only part of the Warner Bros business, rival Paramount had previously offered to buy the entire company, including its cable networks, in October—a bid that Warner Bros rejected before putting itself up for sale.

Industry analysts have highlighted potential impacts on content production, pricing, and competition. Tom Harrington, head of television at Enders Analysis, said the deal could “reorient Hollywood” and might lead to significant reductions in television and film output, prompting resistance from industry stakeholders and unions. For consumers, he suggested that the merger could result in higher subscription costs as Netflix gains greater market penetration, potentially making HBO Max redundant.

Danni Hewson, head of financial analysis at AJ Bell, noted that Netflix’s commitment to continuing theatrical releases of Warner Bros films could serve as an “olive branch” to Hollywood. She added that if regulatory hurdles are cleared swiftly, significant cost savings could be achieved, though scrutiny will remain on whether these savings are passed on to subscribers or whether Netflix gains excessive pricing power in the streaming market.