Warner Bros. To Be Bought By Netflix In $72 Bln Equity Deal

Warner Bros. Discovery

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(RTTNews) - In a merger of majors, streaming video firm Netflix, Inc. is acquiring media and entertainment giant Warner Bros. Discovery, Inc. for a total enterprise value of approximately $82.7 billion, or an equity value of $72.0 billion. The move follows the planned separation of Warner Bros. Discovery's Global Networks division into a new publicly-traded company.

In the pre-market activity, Netflix shares were losing around 4.1 percent to trade at $98.99, while Warner Bros shares were gaining 4 percent, at $25.56.

In a statement, Netflix announced that it has entered into a definitive agreement to acquire Warner Bros., including its film and television studios, HBO Max and HBO.

The cash and stock deal is valued at $27.75 per WBD share. The per share price comprises $23.25 in cash and $4.50 in shares of Netflix common stock for each WBD shareholder.

According to the firm, the stock component is subject to a collar, under which WBD shareholders will receive the agreed price if the 15-day volume weighted average price of Netflix stock price falls between $97.91 and $119.67. If the price is below $97.91, WBD shareholders will receive 0.0460 Netflix shares for each WBD share, while if the price is above $119.67, they will receive 0.0376 Netflix shares for each WBD share.

The company also expects to realize at least $2 billion to $3 billion of cost savings per year by the third year and expects the transaction to be accretive to GAAP earnings per share by year two.

The acquisition is expected to close after the previously announced separation of Warner Bros. Discovery's Global Networks division, Discovery Global. The planned separation is now expected to be completed in the third quarter of fiscal 2026.

The completion of the acquisition is also subject to required regulatory approvals, approval of WBD shareholders and other customary closing conditions. Both companies' Boards of Directors unanimously approved the deal, which is expected to close in 12-18 months.

Under the deal, Netflix said its innovation, global reach and best-in-class streaming service will be combined with Warner Bros.' century-long legacy of storytelling.

Netflix expects to maintain Warner Bros.' current operations. The acquisition is expected to enhance Netflix's studio capabilities, among others, allowing the Company to significantly expand U.S. production capacity and continue to grow investment in original content over the long term.

By offering a wider selection of quality series and films, Netflix also expects to attract and retain more members, and generate incremental revenue and operating income.

It was in June 2025 that Warner Bros. announced plans to separate its Streaming & Studios and Global Networks divisions into two separate publicly traded companies.

Discovery Global will include premier entertainment, sports and news television brands around the world. These will comprise CNN, TNT Sports in the U.S., and Discovery, free-to-air channels across Europe, and digital products such as Discovery+ and Bleacher Report.

Ted Sarandos, co-CEO of Netflix, said, "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."

In the transaction, Moelis & Company LLC is acting as Netflix's financial advisor, while Allen & Company, J.P. Morgan and Evercore are serving as financial advisors to Warner Bros. Discovery.