Netflix to Acquire Warner Bros. Discovery in $82.7 Billion Megadeal
The deal would bring iconic franchises like HBO, Harry Potter, and DC Comics under Netflix's roof, reshaping the global media landscape and facing intense regulatory scrutiny.
Netflix has agreed to acquire the studio and streaming assets of Warner Bros. Discovery in a landmark deal with an enterprise value of $82.7 billion, a move that promises to dramatically reshape the competitive landscape of global media.
The cash-and-stock transaction, which carries an equity value of approximately $72 billion, will unite the streaming pioneer with a century-old Hollywood giant, bringing a vast library of iconic content—including HBO, the Harry Potter franchise, and the DC Comics universe—under a single corporate umbrella. The deal represents a significant strategic pivot for Netflix, transforming it from a content producer and distributor into a powerhouse of intellectual property ownership on par with Disney.
Shares of Warner Bros. Discovery (NASDAQ: WBD) surged on the news, while Netflix (NASDAQ: NFLX) shares saw a modest decline in early trading, reflecting investor apprehension over the acquisition's price tag and the significant regulatory hurdles that lie ahead. The $72 billion equity offer represents a roughly 18% premium to WBD's market capitalization of approximately $60.9 billion before the announcement.
For Warner Bros. Discovery, the acquisition marks the culmination of a tumultuous period following its own mega-merger in 2022. The company has struggled under a mountain of debt, which stood at $34.5 billion as of its latest quarterly report. Under CEO David Zaslav, WBD has undergone aggressive cost-cutting, including widespread layoffs and content write-downs, in an effort to deleverage its balance sheet. This deal provides a definitive solution, offering shareholders a premium and a strategic home for its prized assets.
The move signals a profound strategy shift for Netflix, which has historically focused on organic growth and in-house production. The company is betting that owning a deep well of established, multi-generational IP is essential for long-term dominance in the so-called "streaming wars." The acquisition not only provides a massive back catalog but also opens up lucrative new revenue streams from merchandising, theme parks, and gaming that Netflix has only just begun to explore.
This aggressive pivot towards IP ownership positions Netflix to compete more directly with The Walt Disney Company, which has successfully leveraged its ownership of Marvel, Star Wars, and Pixar across streaming, theatrical releases, and consumer products.
"Acquiring Warner Bros.' IP is a once-in-a-generation opportunity to gain a competitive moat that would have taken decades to build organically," one media analyst noted. "It's a defensive move against rivals and an offensive push into new lines of business beyond subscriptions."
The proposed merger is expected to face a rigorous and lengthy antitrust review from the U.S. Department of Justice and other global regulators. Critics of media consolidation will argue that combining two of the largest content producers will reduce competition and consumer choice. Anticipating these challenges, Netflix has reportedly agreed to a substantial $5 billion breakup fee payable to WBD if the deal is blocked on antitrust grounds.
The transaction is structured to close after Warner Bros. Discovery completes its previously announced plan to separate its linear television networks, such as CNN and Discovery Channel, into a standalone, publicly traded company. Netflix is acquiring the Warner Bros. film and television studios, HBO, and the Max streaming service.
As the industry digests the news, all eyes will turn to Washington, D.C., where regulators will decide the fate of a deal that will redefine the entertainment industry for decades to come.