Netflix earlier explored with Warner Bros.Final agreement reachedNetflix will be valued at approximately $827 billion in total enterprise value (approximately $720 billion in equity value).Acquisition of Warner Bros.' core assetsIt includes its film and television studios, HBO Max, and the HBO business.
According to the agreement, the transaction is structured to be quite complex and strategic.
Warner Bros. Discovery must first complete its previously announced business spin-off plan, spinning off its "Global Networks" division (including CNN, Discovery Channel, TNT Sports, etc.) into a new publicly traded company called "Discovery Global".
Netflix will only officially complete its acquisition of the remaining Warner Bros. assets after the spin-off is expected to be completed in the third quarter of 2026.
A cash and stock acquisition, at $27.75 per share.
In terms of transaction details, Netflix will acquire Warner Bros. Discovery shares for $27.75 per share. The payment method is a hybrid of cash and stock, including $23.25 in cash per share plus Netflix common stock valued at $4.501 per share. This means that Warner Bros. Discovery shareholders will hold Discovery Global shares after the spin-off, while also receiving both cash and stock from Netflix.
A massive collection of film and television IPs: Harry Potter, Game of Thrones, and the DC Universe are included.
What excites consumers most about this deal is the massive integration of its content library. Netflix already owns original content such as Stranger Things and Squid Game, and now it will incorporate Warner Bros.' century-long collection of classic IP assets all at once.
In the future, content including Harry Potter, Game of Thrones, The Lord of the Rings, Batman, and the DC Universe, as well as American TV series such as Friends and The Big Bang Theory, will become part of Netflix's content ecosystem (and these contents were previously available on Netflix but were later made available on HBO).
WarnerMedia operations will remain unchanged, and theatrical distribution will remain the same.
It's worth noting that Netflix has pledged to maintain Warner Bros.' current operating model and build upon its content strengths. Theatrical releases of films will remain unchanged and will not be handled by Netflix. This also highlights Netflix's greater strategic flexibility following its acquisition of traditional studios, moving away from its previous insistence on exclusive streaming releases.
Netflix co-CEO Greg Peters pointed out that the acquisition will strengthen the entire entertainment industry, and is expected to generate at least $20 billion to $30 billion in cost savings annually in the third year after the transaction is completed.
The industry landscape is being reshaped, with regulation becoming the biggest variable.
David Zaslav, CEO of Warner Bros. Discovery, said the split-off Discovery Worldwide will focus on news and sports streaming, while its theater and film assets will be integrated into Netflix.
The deal is expected to close within the next 12 to 18 months, but in addition to waiting for Warner Bros. to explore internal restructuring, it will inevitably face rigorous scrutiny from global antitrust regulators. If the deal goes smoothly, Netflix will possess Hollywood's most powerful content treasury, putting unprecedented pressure on competitors such as Disney+ and Amazon Prime Video.
