Netflix, Inc. entered an agreement to acquire Warner
Bros., including its film and television studios as well as HBO and HBO Max,
from Warner Bros. The cash-and-stock transaction values WBD at $27.75
per share, implying an equity value of about $72.0 billion and an enterprise
value of roughly $82.7 billion.
According to the companies, the deal will close once WBD
completes the previously announced separation of its Global Networks division
into a new publicly traded company, Discovery Global.
Streaming Leader Meets Hollywood Studio
That deal is now expected in the third quarter of
2026, with the acquisition scheduled to follow 12 to 18 months later, subject
to regulatory and shareholder approvals.
It would marry Netflix’s global streaming platform and
distribution network with Warner Bros.’ century-old studio operations and deep
catalogue of film and TV content.
Netflix co-CEO Ted Sarandos said the company’s mission
“has always been to entertain the world” and that bringing together Warner
Bros.’ library “from timeless classics like Casablanca and Citizen Kane to
modern favorites like Harry Potter and Friends” with Netflix titles such as
Stranger Things, KPop Demon Hunters and Squid Game will enable it “to do that
even better.”
Executives Pitch Scale and Content Breadth
Netflix and WBD say the combined group will offer
subscribers more choice and perceived value by adding HBO and HBO Max
programming and Warner Bros.’ extensive catalogue to Netflix’s service. The
company indicated it will use the enlarged library to refine its consumer
plans, potentially by adjusting tiers or packaging, while emphasizing wider
viewing options.
Today, Netflix announced our acquisition of Warner Bros. Together, we’ll define the next century of storytelling, creating an extraordinary entertainment offering for audiences everywhere. pic.twitter.com/0pdsMUEob8
— Netflix (@netflix) December 5, 2025
For investors, Netflix expects the deal to drive
subscriber growth and engagement and to deliver financial synergies. The
company forecasts at least $2–3 billion in annual cost savings by the third
year after closing and expects the transaction to be accretive to GAAP earnings
per share by year two.
Deal Terms and Discovery Global Spin-Off
Under the terms of the agreement, each WBD shareholder
will receive $23.25 in cash and $4.501 in Netflix common stock for each share
of WBD common stock at closing.
The consideration values WBD at $27.75 per share,
consistent with the approximately $72.0 billion equity value and $82.7 billion
enterprise value for Warner Bros. Discovery.
In June 2025, WBD announced plans to split its
Streaming & Studios and Global Networks divisions into separate publicly
traded companies. The separation is now scheduled to complete in the third
quarter of 2026, before the Netflix transaction closes.
Expect ongoing updates as this story evolves.
This article was written by Jared Kirui at www.financemagnates.com.
Source link
