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Netflix secures $72bn deal for Warner Bros entertainment assets
Netflix has reached an agreement to purchase Warner Bros Discovery's film and streaming operations for $72 billion (£54 billion), marking one of Hollywood's largest acquisitions. The transaction, which includes iconic franchises like Harry Potter and Game of Thrones, will create a dominant force in the entertainment industry-pending regulatory approval.
Rival bids and regulatory hurdles
After a protracted bidding war, Netflix outmaneuvered competitors such as Comcast and Paramount Skydance to secure the deal. However, the merger must still clear antitrust reviews, a process Netflix co-CEO Ted Sarandos described as a priority. "We're highly confident in receiving the necessary approvals and are moving full speed ahead," he stated.
Strategic vision and industry impact
Sarandos framed the acquisition as a transformative step for storytelling, combining Warner Bros' legendary content library with Netflix's original productions like Stranger Things. "Warner Bros defined entertainment in the last century. Together, we can shape the next," he said. Co-CEO Greg Peters added that while the HBO brand's value is recognized, specific integration plans remain under development.
Netflix anticipates $2-3 billion in cost savings, primarily by streamlining overlapping technology and support functions. The company also pledged to maintain Warner Bros' theatrical releases and third-party production capabilities, while continuing to produce exclusive content for its own platform.
Financial terms and corporate restructuring
The all-cash and stock deal values Warner Bros shares at $27.75 each, with a total enterprise value of $82.7 billion, including debt. Both companies' boards unanimously approved the transaction. The acquisition will proceed after Warner Bros completes its planned separation of its streaming and studios division from its global networks unit in 2026. The latter, rebranded as Discovery Global, will retain cable channels like CNN and TNT Sports in the U.S., while TNT Sports International will remain with the sold division.
Industry reactions and concerns
"This is a huge statement of intent and underscores Netflix's ambition to lead the new streaming era,"
Paolo Pescatore, PP Foresight
Analysts warn the merger could face resistance from regulators and industry stakeholders. Tom Harrington of Enders Analysis suggested the deal would "reorient Hollywood," potentially reducing film and TV output and sparking opposition from unions. The Directors Guild of America expressed "significant concerns" ahead of the announcement.
Danni Hewson, head of financial analysis at AJ Bell, noted that while cost savings could benefit consumers, regulators will scrutinize whether Netflix gains excessive pricing power. "How much of these savings trickle down to subscribers remains a critical question," she said.
For viewers, the merger may lead to higher subscription costs, as Netflix could leverage its expanded market dominance. Harrington predicted that even if HBO Max is phased out, Netflix's broader reach would likely increase overall subscription revenues.
Warner Bros leadership hails 'historic' partnership
Warner Bros CEO David Zaslav celebrated the agreement as a union of "two of the world's greatest storytelling companies." He emphasized the deal's potential to preserve and amplify Warner Bros' legacy for future generations. Meanwhile, Paramount's earlier bid to acquire the entire company-including cable networks-was rejected by Warner Bros before the sale process began.
