Netflix To Acquire Warner Bros. For A Deal Worth $72 Billion

The statement on December 5, 2025, about Netflix’s deal to purchase Warner Bros. Discovery’s film, TV studio, and streaming assets for an equity value of $72 billion (total enterprise value of $82.7 billion) is true as the entertainment industry underwent a dramatic change when Netflix Inc. decided to acquire Warner Bros. Discovery Inc. The Silicon Valley-born streaming giant is attempting to acquire one of Hollywood’s most prestigious and established studios.

Warner Bros. shareholders will receive $27.75 per share in cash and Netflix shares as part of the agreement, which was announced on Friday. The company is valued at $82.7 billion, including debt. The deal’s total equity value is $72 billion. Before selling its studio and HBO to Netflix, Warner Bros. will separate cable networks like CNN and TNT into their own business.

Media mergers of this magnitude have a troubled past, and this one is expected to draw intensive regulatory scrutiny in the United States and Europe. Paramount Skydance Corp., which accused Warner Bros. of conducting an unfair sales process, might also take efforts to disrupt the purchase, such as making an offer straight to shareholders. The corporation declined to make a remark.

The Netflix acquisition brings together two of the world’s largest streaming services, with over 450 million members. Netflix can maintain its advantage over competitors such as Walt Disney Co. and Paramount thanks to Warner Bros.’ extensive collection of programs.

In its 28-year history, Netflix has never undertaken a deal of this magnitude, so the acquisition, which confirmed a Bloomberg report on Thursday, represents a strategic shift for the company. The HBO network and its collection of popular programs, including The Sopranos and The White Lotus, are acquired by Netflix. In addition to its expansive Burbank, California facilities, Warner Bros. possesses a sizable collection of films and television shows, including Harry Potter and Friends.

During a call with investors on Friday, Netflix co-CEO Ted Sarandos stated, “I know some of you are surprised we are making this acquisition.” Netflix has historically been recognised as builders rather than buyers, he pointed out. “However, this is a unique chance that will enable us to fulfil our goal of entertaining the entire world.”

Friday afternoon in New York, Netflix’s stock fell 3.5%. Since the streaming leader became involved in October, they have decreased by roughly 17%. This transaction has been viewed by some analysts and investors as a sign that Netflix was concerned about its ability to grow its present company, a theory that co-CEO Greg Peters rejected.

At lunchtime in New York, Warner Bros. stock was up approximately 5.2%. It has nearly doubled since September, when reports of an agreement with Paramount emerged.

The announcement caps a whirlwind of dealmaking over the last few months that began with a series of offers by Paramount. That piqued the interest of Comcast Corp. and Netflix, both of which were pursuing only the studio and streaming business. All three presented sweetened proposals earlier this week, with Paramount eventually paying $30 per share for all of Warner Bros. Discovery, arguing that its proposal provided an easier road to regulatory clearance. Netflix won out in the end, however considerable obstacles remain until the transaction can be completed, which the firm anticipates to happen over the next 18 months.

Republican Darrell Issa of California objected to any possible Netflix purchase in a letter to US authorities, claiming it may hurt consumers. However, Alphabet Inc.’s YouTube is one of Netflix’s main rivals, according to Netflix, and bundling offers could result in cheaper subscription costs. Nielsen estimates that between 8% and 9% of US TV viewers watch Netflix each month. Approximately 20% or 25% of streaming is accounted for by it.

Platforms like Reels, TikTok, and YouTube that compete for users’ attention could help the transaction pass antitrust review, according to Oppenheimer analysts.

Fifteen years ago, Time Warner CEO Jeff Bewkes, who was in charge of Warner Bros. and HBO, dismissed Netflix’s threat, likening the nascent company to the Albanian Army. Sarandos stated that Netflix intended to become HBO before HBO figured out streaming when the company started investing in original content.

While Sarandos was successful and Netflix spearheaded Hollywood’s streaming invasion, HBO found it difficult to adapt to the surge of on-demand viewing and the fall of cable. In 2016, Bewkes consented to sell Time Warner to AT&T, which marked the start of ten years of turbulence for Warner Bros. and HBO, two legendary businesses that will soon have their fourth owner in ten years.

Warner Bros. put itself up for sale in October after receiving three buyout proposals from Paramount, which were declined, paving the way for Netflix and Comcast. At Bloomberg’s Screentime conference in October, Peters claimed he didn’t understand the logic of these large transactions, but Sarandos advocated for the deal privately.

The auction became acrimonious, with Paramount accusing Warner Bros. of facilitating an unfair process that favoured Netflix. When the money for the studio and streaming company was added to the projected value of the networks, Netflix’s bid surpassed Paramount’s. The agreement was reached between the two parties Thursday night.

Warner Bros. shareholders will get $23.25 in cash and $4.50 in Netflix common stock under the terms of the deal. Netflix is advised financially by Moelis & Co. According to a regulatory filing, Wells Fargo is serving as an additional financial advisor and, along with BNP Paribas and HSBC Holdings, is contributing $59 billion in debt financing—one of the biggest loans of its kind. Warner Bros. Discovery is using Allen & Co., JPMorgan Chase & Co., and Evercore as its financial advisors.

In the event that the agreement breaks down or is not approved by regulators, Netflix has committed to pay Warner Bros. a $5.8 billion termination fee. Sarandos stated on Friday, “We have a lot of faith in the regulatory process.”

Regulators will probably consider the impact on theatrical releases, which Netflix has historically avoided in favour of giving priority to content on its platform, in addition to streaming overlap.

Netflix announced two significant adjustments to its business strategy: it will continue to distribute Warner Bros. films in theatres and develop the studio’s TV series for outside parties. Netflix further stated that it anticipates maintaining Warner Bros.’ current operations and building on its assets, but it was a little vague about how it will integrate the various businesses.

According to the firm, the agreement will enable Netflix to “significantly expand” its production capacity in the US and invest in original content, which will boost the entertainment sector and generate jobs. By the third year, the combination is anticipated to save “at least $2 billion to $3 billion” annually.

David Zaslav, CEO of Warner Bros. Discovery, was the driving force behind the 2022 merger of Warner Bros. and Discovery, which he believed would establish a strong rival to Netflix. However, a string of public blunders and the ongoing downturn in the cable network industry caused the company’s stock price to plummet.

Although the company’s performance has somewhat improved over the past year, Zaslav never saw it develop into the streaming powerhouse he had imagined. Through the company’s sale and spinoff, he will continue to manage it. There is currently no agreement between the two firms about his employment at Netflix.

As more people turn to streaming, which Netflix controls, the traditional TV industry is experiencing a significant decline. Warner Bros.’ cable TV networks division reported a 23% drop in revenue in the most recent quarter due to advertisers moving elsewhere and customers cancelling their subscriptions.

Further information shows that the agreement is under intense investigation and may encounter resistance; it is not yet finalised:

Due to the regulatory approval and the worries about media consolidation, the acquisition will need to be approved by government regulators in the United States and Europe. Many experts anticipate a thorough antitrust investigation.

The industry backlash with respect to the agreement has drawn criticism from a number of organisations, including the Directors Guild of America (DGA), the Writers Guild of America (WGA), and trade associations for the film industry. These organisations worry that the deal will result in fewer jobs, less creative control, less diversity of content, and endanger the future of movie theatres.

Also the impact on consumers as lawmakers and analysts are worried that Netflix’s growing market domination would result in higher membership costs and fewer options for customers.

Netflix is “highly confident” that the required approvals will be granted.