Netflix to buy Warner Bros Discovery’s studio and streaming arm in $82.7 bn deal

New Delhi: Netflix has agreed to buy Warner Bros Discovery’s film and TV studios and streaming division in a cash-and-stock deal valuing the business at about $82.7 billion.

Under the agreement, Warner Bros Discovery (WBD) shareholders will receive $23.25 in cash and roughly $4.50 in Netflix stock per share, valuing WBD at $27.75 a share and around $72 billion in equity, with the rest of the enterprise value coming from assumed debt.

The deal will give Netflix control of some of Hollywood’s most powerful franchises, including Harry Potter, Game of Thrones, Friends, the DC universe and Warner’s classic film and TV library, alongside its own hits such as Stranger Things and Squid Game.

The transaction covers Warner’s studio and streaming assets like HBO, HBO Max and Warner Bros Television and Motion Picture Group, but excludes its cable networks such as CNN, Discovery and TNT Sports. Those will be spun off into a separate, publicly traded company called Discovery Global before the Netflix deal closes.

Shows and movies such as The Big Bang Theory, The Sopranos, Game of Thrones, The Wizard of Oz and the DC Universe will join Netflix’s portfolio, including Wednesday, Money Heist, Bridgerton, Adolescence and Extraction.

The separation of Discovery Global is now expected to be completed in the third quarter of 2026, with the Netflix–Warner deal slated to close 12–18 months from now, subject to shareholder approvals and regulatory clearance in the US and Europe.

Netflix has also agreed to a $5.8 billion breakup fee if it walks away from the deal, while Warner Bros Discovery would owe $2.8 billion if it withdraws.

Netflix co-CEO Ted Sarandos said the combination would advance the company’s mission “to entertain the world”, adding that bringing Warner’s century-old studio and premium HBO programming under the same roof as Netflix’s global streaming platform would “give audiences more of what they love” and help define “the next century of storytelling”.

Warner Bros Discovery chief executive David Zaslav said Warner had spent more than 100 years shaping global culture through its films and series, and that joining forces with Netflix would ensure those stories reached even larger audiences worldwide in the years ahead.

Netflix has pledged to maintain Warner’s theatrical release model for its studio films, a key concern for cinema owners and creatives who fear a streaming owner could push more titles straight to OTT.

The agreement caps months of intense speculation and a competitive bidding process. Paramount Skydance and Comcast had also pursued Warner Bros Discovery after the company signalled in October that it was open to a sale alongside a broader restructuring.

Reuters reported that Netflix’s near-$28 per share offer for the studios-and-streaming business effectively eclipsed rival bids, with the final terms reflecting a premium of more than 120% to WBD’s share price before deal talks became public in September.

Following the announcement, Warner Bros Discovery shares rose in early trading, while Netflix and some rival media stocks fell amid investor concerns over deal costs and potential regulatory hurdles.

Regulators on both sides of the Atlantic are expected to subject the deal to heavy scrutiny, given it would combine the world’s largest subscription streamer with a major studio group and premium service HBO Max, which together count well over 200 million streaming subscribers.

Netflix projected annual cost savings of $2–3 billion by the third year after closing, driven by synergies across technology, marketing and content spend.

The acquisition marks a sharp turn for Netflix, which has largely avoided major M&A and traditional media assets in the past, preferring to build its own content machine. As recently as October, Sarandos had publicly signalled little interest in owning “legacy media networks”.

But slowing growth, rising competition and Netflix’s ambitions in areas such as gaming appear to have changed the calculus. Owning Warner’s IP and game successes, including the billion-dollar Hogwarts Legacy title, could give Netflix more leverage as it tries to build a broader entertainment ecosystem beyond video streaming.

For Warner Bros Discovery, the deal offers a way to reduce debt and resolve strategic questions that have dogged the company since its own merger in 2022, while preserving a separate cable-focused business under the Discovery Global banner.