Seismic move will see the global streamer buying the HBO owner’s studio and streaming operations
Netflix is to acquire Warner Bros. Discovery (WBD)’s streaming and studio assets in a £62bn ($82.7bn) deal.
The two companies have entered into a definitive agreement that will see Netflix paying $27.75 per share for The Sopranos, Game of Thrones and Harry Potter owner.
The deal is expected to close in the next 12-18 months, after the previously announced separation of WBD’s Global Networks division, Discovery Global, becomes a new publicly-traded company, which is expected to be completed in Q3 2026.
Confirmation of the deal comes after US reports overnight that suggested that Netflix had offered $28 per share.
The deal means shows such as The Big Bang Theory, GoT, House of the Dragon, The Last of Us, The Wizard of Oz and the DC Universe will join Netflix’s portfolio, which includes Wednesday, Money Heist, Bridgerton, Adolescence and Extraction.
The companies said it would create “an extraordinary entertainment offering for audiences worldwide”, with Netflix adding that it expects to maintain Warner Bros.’ current operations and “build on its strengths”, including theatrical releases for films.
Details of how the two companies will combine have not been revealed but Netflix said that “adding the deep film and TV libraries and HBO and HBO Max programming” would mean its members would have “even more high-quality titles from which to choose”.
The companies expects to make $2-3bn worth of cost savings per year within three years of the deal closing, adding that the acquisition would allow Netflix to “significantly expand US production capacity” and grow investment in original content.
The deal will require regulatory approval while US unions have previously expressed fears that a WBD sale would reduce jobs.
’Business accelerator’
Unveiling the deal, Netflix co-chief exec Ted Sarandos said the acquisition would ”define the next century of storytelling”.
“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,” he said.
“This acquisition will improve our offering and accelerate our business for decades to come,” continued Greg Peters, co-chief exec 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.”
WBD chief exec David Zaslav added: “Today’s announcement combines two of the greatest storytelling companies in the world to bring to even more people the entertainment they love to watch the most.
“For more than a century, Warner Bros. has thrilled audiences, captured the world’s attention, and shaped our culture. By coming together with Netflix, we will ensure people everywhere will continue to enjoy the world’s most resonant stories for generations to come.”
Deal specifics
Under the terms of the agreement, each WBD shareholder will receive $23.25 in cash and $4.501 in shares of Netflix common stock for each share of WBD common stock outstanding at the closing of the transaction.
The transaction values Warner Bros. Discovery at $27.75 per share, implying a total equity value of approximately $72.0bn and an enterprise value of approximately $82.7bn.
The transaction was unanimously approved by the boards of directors of both Netflix and WBD, but it remains subject to regulatory approvals.
Paramount Skydance and NBC Universal owner Comcast had also been in the race to acquire WBD assets, both making non-binding preliminary bids in late November.
WBD put itself on the block in October after three bids from Ellison’s Paramount Skydance were rejected.
Alongside the M&A process is the ongoing reorganisation of WBD into two entities, one of which is now set to be acquired by Netflix, and the expansion of HBO Max.
The latter is set to all-but round out its European roll-out early next year, with launches in Italy and Germany in January, and the UK in March.
No comments yet