Netflix to buy Warner Bros. Discovery in deal of the decade

AFP/APP

New York: Streaming giant Netflix said Friday it will buy film and television studio Warner Bros. Discovery for nearly $83 billion, marking the entertainment industry’s biggest consolidation deal of the decade.

The acquisition will give Netflix access to Warner Bros.’ vast film and TV catalog as well as the prestigious streaming platform HBO Max.

Over the decades, Warner Bros. has produced cinematic classics such as Casablanca and Citizen Kane, along with modern blockbusters including The Sopranos, Game of Thrones and the Harry Potter franchise.

“Together, we can give audiences more of what they love and help define the next century of storytelling,” said Ted Sarandos, co-CEO of Netflix, whose platform has produced global hits such as Stranger Things, KPop Demon Hunters and Squid Game.

The largest previous deal of this scale was Disney’s $71 billion acquisition of Fox in 2019.

The transaction values Warner Bros. Discovery at $27.75 per share, implying an equity value of approximately $72 billion and an enterprise value — including debt — of around $82.7 billion. Warner Bros. Discovery shares closed at $24.54 on the Nasdaq on Thursday.

“Today’s announcement combines two of the greatest storytelling companies in the world,” said David Zaslav, President and CEO of Warner Bros. Discovery.

The deal, unanimously approved by the boards of both companies, is expected to close within 12 to 18 months.

“Netflix aims to dominate Hollywood,” said Kathleen Brooks, research director at XTB. She warned of potential challenges, including concerns over Netflix becoming a monopoly as it takes control of “a colossus in the TV and movie business.”

Antitrust issues expected

Netflix’s stock weakened Thursday amid intensifying speculation over the merger. Brooks noted that Netflix “has never attempted a deal of this size before,” raising questions about management of the new mega-company.

She also highlighted likely political and regulatory hurdles, as the deal will require approval from U.S. antitrust authorities and possibly regulators in other countries.

Warner Bros. Discovery officially put itself up for sale in October after receiving multiple unsolicited offers, shelving an earlier plan to split into two separate entities — one for streaming and studios, and another for cable networks.

The company had been an acquisition target for Paramount, recently bought by the billionaire tech family of Oracle founder Larry Ellison. According to Bloomberg, Netflix joined Paramount Skydance and Comcast — owner of NBCUniversal — in the second round of bidding, held through the U.S. Thanksgiving holiday.

Netflix, the world’s largest streaming service with more than 280 million global subscribers, has been arranging a bridge loan worth tens of billions of dollars to finance the purchase, Bloomberg reported.

Top Hollywood insiders reportedly opposed a Netflix takeover, citing fears the company could reduce theatrical releases for major films. Titanic director James Cameron previously called any sale of Warner Bros. to Netflix “a disaster.”