Netflix to buy Warner Bros in $72 billion streaming power move

Netflix is set to acquire Warner Bros. Discovery for $72 billion (£54 billion) and as a result, gaining blockbuster franchises such as Harry Potter and Game of Thrones and a vast TV library.

The deal follows a heated bidding war with Paramount Skydance and Comcast, which owns Universal Studios and Sky News. Key assets include Warner Bros., HBO, HBO Max, and DC Studios, giving Netflix instant access to some of Hollywood’s most valuable content.

The streamer will also add classic TV shows such as Friends and The Big Bang Theory to its lineup, while taking control of TNT Sports UK & Ireland, home to Premier League, Champions League, and international rugby broadcasts.

Netflix has offered a $5.8 billion breakup fee if regulators block the deal, while WBD would pay $2.8 billion if the deal is delayed or cancelled. Analysts warn the merger could trigger antitrust scrutiny, combining two of the U.S.’s largest streaming platforms.

Netflix expects to achieve $2 billion to $3 billion in savings, primarily by eliminating redundancies in the support and technology divisions of the businesses. The $27.75-per-share cash-and-stock deal values Warner Bros at about $82.7 billion, including debt, with a $72 billion equity price.

Warner Bros films will continue to be released in theatres, and its television studio will still be able to produce content for third parties. Netflix, meanwhile, will continue producing content exclusively for its own platform. Despite this, concerns remain that the merger could lead to higher prices for subscribers.

The boards of both companies approved the merger, but it faces pushback from the film industry, as well as President Trump. The East and West branches of the Writers Guild of America called on regulators to block the deal.

“Our mission has always been to entertain the world,” said Ted Sarandos, co-CEO of Netflix. “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.”

However, Paramount Skydance have just submitted a new bid to acquire Warner Bros. Discovery, aiming to outmanoeuvre Netflix’s competing offer for the company’s studio and streaming assets.

Supported by the billionaire Ellison family, Paramount announced a direct proposal to shareholders, offering $30 per share to purchase the entire company, including its conventional television networks.