Netflix's $82.7 billion deal for Warner Bros. Discovery
- Expected to close in 12 to 18 months
- Netflix to own WBD's studio and HBO Max
- Cash & stock deal at $27.75 per WBD share
- $72B equity value / $82.7B enterprise value
- Both company boards approved deal unanimously
- Early indications from DC say the White House views deal with "heavy skepticism"
- Warner Bros still intends to spin out its global networks unit (CNN, TNT, Discovery, etc.) in a separate deal
Netflix has announced a definitive agreement to acquire Warner Bros. Discovery's (WBD) studios, streaming business (including HBO and HBO Max), and related assets in a transformative deal valued at an equity price of $72 billion and an enterprise value of $82.7 billion.
The acquisition follows a weeks-long bidding war and marks a seismic shift in the entertainment industry, combining Netflix's global streaming dominance with Warner Bros.' storied legacy in film, TV, and IP. The deal excludes WBD's Global Networks division (e.g., CNN, TNT, Discovery+), which will be spun off into a separate publicly traded company named Discovery Global, expected to complete in Q3 2026.
The transaction was unanimously approved by both companies' boards and is positioned as a way to enhance content offerings for consumers while driving efficiencies. Netflix co-CEOs Ted Sarandos and Greg Peters described it as uniting "two pioneering entertainment businesses," emphasizing innovation and storytelling. WBD CEO David Zaslav highlighted Warner Bros.' century-long impact on audiences.
Deal Terms
- Valuation and Payment Structure: WBD shareholders will receive $23.25 in cash and 4.501 shares of Netflix common stock per WBD share, valuing the acquired assets at $27.75 per share.
- Timeline: The deal is contingent on the Discovery Global spin-off, regulatory approvals (including antitrust reviews in the U.S. and Europe), WBD shareholder approval, and other standard conditions. Closing is anticipated post-spin-off in late 2026.
- Breakup Fees: Netflix will pay a $5.8 billion reverse breakup fee if the deal fails due to regulatory issues; WBD faces a $2.8 billion fee if it backs out for another offer.
- Synergies: Netflix projects $2–3 billion in annual cost savings by year three, through optimized production, content distribution, and operations.