Netflix has won a three-way battle with Paramount and Comcast to acquire the Hollywood studio and streaming giant Warner Bros. Discovery in a deal valued at almost $83 billion (around £62.7 billion).
The deal was announced Friday afternoon in the U.S., and upon approval it will give Netflix ownership of Warner Bros.’s massive portfolio of films and TV programmes, in addition to its popular streaming service HBO Max. The streaming giant has not said exactly what its plans are going forward, but promised that its customers will get more choice and more value from the deal.
Warner Bros.’s intellectual property is a key part of the deal, giving Netflix the rights to franchises such as Superman, Batman, Looney Tunes, Lord of the Rings, Dune and Harry Potter, as well as the vast trove of programmes and movies owned by HBO Max, such as the popular behind-the-scenes NFL show Hard Knocks and series such as Game of Thrones, The Sopranos, Friends, The White Lotus and The Last of Us.
Netflix said it will pay $82.7 billion in a mostly cash deal to acquire Warner Bros., valuing the movie giant at $27.75 per share. Shareholders will receive $23.25 in cash and $4.5 in Netflix stock for each share of Warner Bros. they own.
The deal includes the Warner Bros. film studio and related operations, such as the HBO series studio and the HBO Max streaming service. However, it excludes other properties, such as Discovery, CNN, TNT Sports and the Discovery+ streaming service. Warner Bros. said it will look to sell those parts of its business separately.
Netflix said the deal is expected to conclude in around 12-18 months, subject to the necessary approvals from antitrust authorities and shareholders. There’s a good chance it will be approved, for the acquisition has precedents, with Walt Disney Co. buying 21st Century Fox for $71 billion in 2019, and Amazon purchasing MGM back in 2021 for $8.5 billion.
In addition to providing more value to its customers, Netflix said the deal will also strengthen the broader entertainment industry. For one thing, it said the two companies have complementary strengths, with Warner Bros. operating world-class film and TV studios that have brought it recognition as one of the most important names in Hollywood. HBO and HBO Max are also widely respected entertainment offerings with millions of subscribers globally.
Netflix said it will “maintain Warner Bros’ current operations and build on its strengths,” promising more theatrical releases in future.
However, going forward, we can expect Netflix to integrate Warner Bros.’ films and HBO’s content into its own streaming platform, and that could well mean the closure of the HBO Max app at some point in future. It’s likely going to bring all of HBO’s titles into its own libraries, which will make its subscriptions much more valuable to consumers, the company said.
The deal will also enhance Netflix’s ability to create original content. With Warner Bros.’ studios falling under its control, it will be able to expand its film and TV production capacity in the U.S. and invest more in original content. Finally, the streamer said it will result in more opportunities for creators to tell new stories and get them seen by a wider audience than before.
Netflix co-CEO Ted Sarandos said his company’s mission has always been to entertain the world, and the deal will help it to do that better than ever. “Together, we can give audiences more of what they love and help define the next century of storytelling,” he said.
