Netflix has announced its has secured an historic landmark deal to purchase Warner Bros studio and streaming business for nearly $83billion (£62.2billion) in a move that could change Hollywood forever.
The streaming giant bet out Paramount Skydance's efforts, spearheaded by tech billionaire Larry Ellison, to take over the iconic movie studio's renowned film and television production facilities.
This deal also encompasses the HBO Max and HBO streaming platforms, in a transaction worth roughly $82.7billion (£61.9billion) in enterprise value. The acquisition unites two major forces in global entertainment, bringing together Warner Bros.' storied catalogue of beloved properties with Netflix's existing content library.
Iconic franchises including Game of Thrones, Harry Potter, Batman and the DC Universe will now sit alongside Netflix originals such as Stranger Things, Squid Game and Wednesday.
Netflix has secured a deal to take over Warner Bros for $83bn
|GETTY
Before the deal closes, Warner Bros. Discovery must first complete the separation of its Global Networks division into an independent publicly traded entity called Discovery Global, a process now expected to conclude in the third quarter of 2026.
This spin-off will retain CNN, TNT Sports in America, Discovery channels, and digital platforms including Discovery+ and Bleacher Report.
Ted Sarandos, Netflix's co-chief executive, said: "Our mission has always been to entertain the world.
"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.
The future of cinemas is on the line with the Netflix-Warner Bros merger
| PA"Together, we can give audiences more of what they love and help define the next century of storytelling."
Netflix's other co-CEO Greg Peters described the acquisition as something that "will improve our offering and accelerate our business for decades to come".
Warner Bros. Discovery chief executive David Zaslav stated: "Today's announcement combines two of the greatest storytelling companies in the world to bring to even more people the entertainment they love to watch the most."
Netflix anticipates the merger will generate annual cost savings of between $2billion and $3billion by the third year following completion.
The company expects the deal to boost earnings per share on a GAAP basis within two years.
Subscribers stand to benefit from substantially expanded content libraries, with Netflix planning to enhance viewing options and broaden access to programming through optimised subscription plans.
The streaming giant intends to preserve Warner Bros.' existing operations and continue building on its strengths, including maintaining theatrical releases for films.
Netflix believes the acquisition will significantly increase its American production capacity and enable continued growth in original content investment over the long term, creating employment opportunities and bolstering the wider entertainment sector.
Warner Bros owns the Harry Potter film rights
| WARNER BROS/HBO/YOUTUBEDespite Netflix pledging to respect Warner Bros. commitment to movie theaters, concerns have been raised over the future of cinemas as the streaming giant becomes an even bigger player in Tinseltown.
As well as this, analysts question whether the deal will be accepted by US regulators as critics argue the deal could create a monopoly and disenfranchise competitors in the space.
In a letter to Warner Bros. suits from Paramount's legal team, Mr Zaslav demanded "fairness and adequacy" in the bidding process amid reports that the studio's management preferred Netflix taking over the business.
Furthermore, Paramount CEO David Ellison has requested confirmation on whether Warner Bros Discovery has created an independent special committee of unbiased board members to oversee the process.
Danni Hewson, AJ Bell head of financial analysis, said: "Netflix had quickly emerged as the frontrunner to take over the ailing Warner Bros Discovery’s film and TV studios, so it came as no big surprise to learn it had got the $7 billion deal over the line.
"But the handshake is the easy bit, getting it past regulators is likely to be considerably more difficult, especially when you consider the political temperature.Paramount Skydance – owned by David Ellison, one of Donald Trump’s biggest supporters – had been one of the rival suitors hoping that its bid to take over the whole kit and caboodle might win over the board.
"It could also be argued that Netflix is picking off the cherry on top of the Warner Bros empire and leaving the problem of what to do with the cable networks to someone else once that part of the business is spun off.
"For Netflix, the benefits are obvious. Adding the likes of Game of Thrones, Harry Potter and the DC Universe to its roster of content is a huge win, as is snapping up all those streaming subscribers that currently plump for HBO Max."
“Netflix has offered an olive branch to a nervous Hollywood, with promises to keep releasing Warner Bros studio films on the big screen. It might be a streaming behemoth but it’s also a disrupter, a relatively new kid on the block that was once looked down on by the boss of the very studio it’s now going to own."