Netflix, Inc. and Warner Bros. Discovery, Inc. jointly announced this morning that they have signed a definitive agreement for Netflix to acquire the Warner Bros. film and television studios along with the HBO and HBO Max brands in a cash-and-stock transaction valued at approximately $82.7 billion in enterprise value. This comes as it was reported earlier that they had started exclusive talks with Warner Bros. Discovery.
The deal, which values Warner Bros. Discovery shares at $27.75 each, represents a total equity value of $72 billion. Shareholders of Warner Bros. Discovery will receive $23.25 in cash and a fixed $4.50 worth of Netflix common stock per share, subject to a collar mechanism tied to Netflix’s share price in the days leading up to closing.
Now comes the tough part: not only do the two sides need to iron out a final deal now that they’ve entered exclusive talks, but they must also secure regulatory clearance and fend off any legal challenges or hostile takeover bids that may emerge from Paramount.
Warner Bros. Discovery staff is reportedly gathering today for a town hall to announce the deal and Claire Atkinson reports that a Chief Intergration Officer will be hired to merge the companies.
The transaction will proceed only after Warner Bros. Discovery completes its previously disclosed plan to separate its Global Networks division – encompassing CNN, TNT Sports, Discovery Channel, and related international assets – into an independent publicly traded company named Discovery Global. That spin-off is now scheduled for the third quarter of 2026, pushing the expected closing of the Netflix acquisition to between mid-2026 and early 2027, pending regulatory and shareholder approvals.
The combination instantly catapults Netflix into possession of one of the most storied libraries in entertainment history. Iconic franchises including the DC Universe, Harry Potter, Game of Thrones, The Sopranos, Friends, The Matrix, and classic films such as Casablanca, The Wizard of Oz, and Citizen Kane will sit alongside Netflix originals like Stranger Things, Squid Game, Bridgerton, Wednesday, and the upcoming KPop Demon Hunters.
Netflix executives described the acquisition as a decisive step toward building the definitive global entertainment platform, leveraging Warner Bros.’ century of production excellence and HBO’s reputation for prestige television while preserving the studio’s theatrical film business. The company intends to maintain existing Warner Bros. operations in Burbank and continue releasing major films in cinemas.
“Our mission has always been to entertain the world,” said Ted Sarandos, co-CEO of Netflix. “By combining Warner Bros.’ incredible library of shows and movies—from timeless classics like Casablanca and Citizen Kane to modern favorites like Harry Potter and Friends—with our culture-defining titles like Stranger Things, KPop Demon Hunters and Squid Game, we’ll be able to do that even better. Together, we can give audiences more of what they love and help define the next century of storytelling.”
“This acquisition will improve our offering and accelerate our business for decades to come,” continued Greg Peters, co-CEO of Netflix. “Warner Bros. has helped define entertainment for more than a century and continues to do so with phenomenal creative executives and production capabilities. With our global reach and proven business model, we can introduce a broader audience to the worlds they create—giving our members more options, attracting more fans to our best-in-class streaming service, strengthening the entire entertainment industry and creating more value for shareholders.”
The merger is projected to generate between $2 billion and $3 billion in annual cost synergies by the third year after closing and to become accretive to Netflix’s GAAP earnings per share within two years. Netflix also signaled plans to significantly expand U.S. production capacity and increase long-term investment in original content.
For consumers, the addition of HBO’s current slate and the vast Warner Bros. catalog is expected to deepen Netflix’s content moat at a time when streaming competition remains intense. Industry observers note that the deal would consolidate two of the largest remaining independent content libraries under one roof, potentially altering licensing dynamics across the sector.
Regulatory scrutiny is anticipated to be intense given the transaction’s scale and its implications for competition in both streaming and traditional media. Sources familiar with the process indicate both companies are preparing extensive filings to address antitrust concerns, particularly around the combination of HBO Max’s premium positioning with Netflix’s market-leading subscriber base.
Wall Street reacted swiftly in pre-market trading, with Warner Bros. Discovery shares jumping toward the $27.75 offer level and Netflix shares experiencing moderate pressure as investors digested the sizeable equity and debt components of the financing package. Wells Fargo, BNP Paribas, and HSBC have committed the necessary debt financing, while Moelis & Company and Skadden Arps advised Netflix, and a consortium led by Allen & Company, J.P. Morgan, and Evercore counseled Warner Bros. Discovery.
If completed, the acquisition would mark the largest media merger since Disney’s purchase of 21st Century Fox and cement Netflix’s transformation from a DVD-by-mail service launched in 1997 into the owner of one of Hollywood’s historic major studios – a development few industry veterans would have predicted even five years ago.
Further details on integration plans, branding for HBO Max, and leadership structure are expected in the coming months as the companies move toward regulatory review and the Discovery Global separation.
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