Netflix has confirmed it will acquire Warner Bros Discovery’s film and television studios and streaming service HBO Max for an equity value of around $108.5 billion.
The agreement comes after a weeks-long bidding war where Netflix and David Ellison-led Paramount were battling for the acquisition of the whole of Warner Bros.
The merger will also see beloved shows and movies such as The Big Bang Theory, Game of Thrones, and The Wizard of Oz join Netflix’s portfolio.
According to Netflix, the transaction is expected to close after the previously announced separation of Warner Bros’ global networks division, Discovery Global, into a new publicly-traded company, which is now expected to be completed in Q3 2026.
The Warner Bros studios in California. (Reuters: Mike Blake)
The newly separated company will include premier entertainment, sports, and news television brands around the world, including CNN and TNT Sports in the US, as well as digital products such as Discovery+ and Bleacher Report.
“This acquisition will improve our offering and accelerate our business for decades to come,” Greg Peters, co-CEO of Netflix, told the market on Friday.
“Warner Bros has helped define entertainment for more than a century and continues to do so with phenomenal creative executives and production capabilities.
“With our global reach and proven business model, we can introduce a broader audience to the worlds they create — giving our members more options, attracting more fans to our best-in-class streaming service, strengthening the entire entertainment industry and creating more value for shareholders.”
Under the terms of the agreement, each Warner Bros (WBD) shareholder will receive $US23.25 in cash and $US4.501 in shares of Netflix common stock for each share of WBD common stock outstanding at the closing of the transaction.
The transaction values Warner Bros Discovery at $US27.75 per share, implying a total equity value of $US72 billion and an enterprise value of $US82.7 billion.
What a new streaming service means for Aus TV
Warner Bros shares were up 2.4 per cent at $US25 in premarket trading, while Netflix fell nearly 3 per cent and Paramount 2.2 per cent.
In March, HBO Max, previously known as Max, launched in Australia — the last of the major international streaming services to enter the country’s media market.
Analysts said Netflix was driven by a desire to lock up long-term rights to hit shows and films, and to rely less on outside studios as it expands into gaming and seeks new avenues of growth after the success of its password-sharing crackdown, Reuters reported.
But the deal would likely face strong antitrust scrutiny in Europe and America as it would give the world’s biggest streaming service ownership of a rival that is home to HBO Max and boasts nearly 130 million streaming subscribers.
ABC/Reuters
