Netflix to buy Warner Bros in $72B deal after brutal bidding war
Netflix on Friday announced plans to acquire Warner Bros. Discovery’s studio and streaming business in a $72 billion deal – beating out Paramount and Comcast after a brutal bidding war.
The merger is set to take place after WBD spins off its Discovery Global business into a new publicly-traded company, which is expected to be completed in the third quarter of 2026.
The total value of the deal is $82.7 billion, including debt.
Netflix’s proposal to take over the Warner Bros. film and TV studios, HBO and HBO Max – a mammoth deal that would combine two of the world’s largest streaming services – is valued at $27.75 per share.
Netflix on Friday announced plans to acquire Warner Bros. Discovery’s studio and streaming business in an $82.7 billion deal. AFP via Getty Images
“Together, we can give audiences more of what they love and help define the next century of storytelling,” Ted Sarandos, co-chief executive of Netflix, said in a statement.
Paramount, Comcast and Netflix all submitted sweetened offers for the company this week, including a nearly all-cash proposal from Netflix.
Following reports the media giant was leaning toward Netflix, Paramount sent two letters to WBD’s lawyers and CEO David Zaslav questioning the “fairness and adequacy” of the auction.
In one letter, Paramount bashed Netflix’s bid, arguing a deal with the streaming giant would likely “never close” because of regulatory challenges in the US and overseas, according to the Wall Street Journal.
In another missive, it accused WBD of abandoning “the semblance and reality of a fair transaction process, thereby abdicating its duties to stockholders,” Paramount’s attorneys at Quinn Emanuel wrote, according to a copy of the letter obtained by CNBC.
In a response to The Post on Thursday, WBD said the company has “robustly complied” with fiduciary obligations.
The Post previously reported on mounting speculation that WBD was favoring a deal with Netflix, as insiders noted Sarandos is said to be close with WBD’s Zaslav.
Paramount sent two letters to WBD’s lawyers and CEO David Zaslav (above) questioning the “fairness and adequacy” of the auction earlier this week. AFP via Getty Images
But even with a Netflix deal in the works, the billionaire Ellison family at Paramount Skydance is planning to plead directly with WBD shareholders – arguing the tie-up would be halted by regulators, sources told The Post earlier this week.
Senior White House officials have already met to discuss antitrust concerns about a potential WBD-Netflix merger, The Post reported.
In a press release on Friday, Netflix argued the deal would bring “more choice and greater value for consumers” by combining WBD titles like “Harry Potter” and “Friends” with Netflix’s library, including “Stranger Things,” “KPop Demon Hunters” and “Squid Game.”
A group of anonymous film producers on Thursday sent a letter to Congress with “grave concerns” about a Netflix deal, arguing “Netflix views any time spent watching a movie in a theater as time not spent on their platform,” according to Variety.
The merger is set to take place after WBD spins off its Discovery Global business into a new publicly-traded company. AFP via Getty Images
But the deal includes a promise from Netflix to continue theatrical movie releases for WBD – a big change for the streaming giant.
The streaming giant has been planning to argue there is no evidence that a deal with the HBO Max owner would reduce competition or harm consumers, since they could offer a Netflix and HBO Max bundle that would ultimately cost less, a source familiar with the matter told the Journal.
Last week, Warner Bros. asked bidders to submit improved offers by Dec. 1, after rejecting a $24-a-share bid from Paramount in October.
WBD initially announced it was exploring options for a sale in October.
If approved, the Netflix deal comes close on the heels of an $8.4 billion merger of Skydance Media and Paramount Global in July, which was approved after months of back and forth over antitrust and political concerns.
The FCC finally greenlit the deal after Skydance vowed to scrap DEI at Paramount and appoint a media bias ombudsman at CBS News.