Netflix to Buy Warner Bros. and HBO Max in $82.7 Billion Deal

It’s official: In a move that will dramatically reshape the entertainment business, Netflix and Warner Bros. Discovery announced an agreement Friday under which Netflix will acquire Warner Bros., including its film and TV studios, HBO Max and HBO.

The deal has a total enterprise value (including debt) of approximately $82.7 billion, with an equity value of $72 billion, the companies said. The announcement of Netflix’s deal to buy the Warner Bros. streaming and studios business came after a weeks-long bidding war that pitted the streaming giant against David Ellison’s Paramount Skydance and Comcast. News broke Thursday evening that Netflix had entered into exclusive negotiations with WBD on a deal for Warner Bros. and HBO Max.

“I know some of you are surprised we are making this acquisition,” Netflix co-CEO Ted Sarandos said on a call with analysts Friday, noting the company historically has been more “builders” than “buyers.”

Netflix said it expects “to maintain Warner Bros.’ current operations and build on its strengths,” including theatrical releases for films. Currently, Warner Bros. has deals to release its film in cinemas through 2029. In the near term, Netflix signaled it would keep HBO Max as a discrete service, while it also touted the addition of HBO and HBO Max content to its lineup.

“By adding the deep film and TV libraries and HBO and HBO Max programming, Netflix members will have even more high-quality titles from which to choose,” the company said. “This also allows Netflix to optimize its plans for consumers, enhancing viewing options and expanding access to content.”

Netflix said it expects to see $2 billion-$3 billion in cost savings annually by the third year after the WB deal closes. The company expects the transaction to be accretive to earnings per share by year two.

The cash and stock transaction is valued at $27.75 per share of WBD. The deal is expected to close in the next 12-18 months, the companies said, after the previously announced separation of WBD’s TV networks division, Discovery Global, into a new publicly traded company, which is now expected to be completed in the third quarter of 2026.

Under the terms of the agreement, each WBD shareholder will receive $23.25 in cash and $4.50 in shares of Netflix common stock for each share of WBD common stock outstanding at the closing of the transaction.

The transaction was unanimously approved by the boards of directors of both Netflix and Warner Bros. Discovery. The deal is contingent on the completion of the spin-off of Discovery Global as well as regulatory approvals, the approval of the deal by WBD shareholders and other “customary closing conditions.”

According to the companies, “This acquisition brings together two pioneering entertainment businesses, combining Netflix’s innovation, global reach and best-in-class streaming service with Warner Bros.’ century-long legacy of world-class storytelling. Beloved franchises, shows and movies such as ‘The Big Bang Theory,’ ‘The Sopranos,’ ‘Game of Thrones,’ ‘The Wizard of Oz’ and the DC Universe will join Netflix’s extensive portfolio including ‘Wednesday,’ ‘Money Heist,’ ‘Bridgerton,’ ‘Adolescence’ and ‘Extraction,’ creating an extraordinary entertainment offering for audiences worldwide.”

The deal announcement did not say what role, if any, David Zaslav, president and CEO of Warner Bros. Discovery, will have as a result upon the completion of the deal. Zaslav was set to become CEO of the stand-alone Warner Bros. entity.

Netflix faces a potential hurdle in clearing the WB deal over antitrust issues — a point that Ellison’s Paramount Skydance emphasized in its communications with the WBD board in its last bid. Rep. Darrell Issa, R-Calif., raised that concern in a Nov. 13 letter to Trump administration officials, writing, “With more than 300 million global subscribers and a vast content library, Netflix currently wields unequaled market power.”

Under the agreement, Netflix will pay WBD a breakup fee of $5.8 billion if the deal fails to close “under certain circumstances relating to the failure to obtain approvals” or if U.S. or international regulatory bodies block the transaction, the streamer disclosed in an SEC filing.

“We’ve signed a deal [and] we are running full speed toward regulatory approval,” Sarandos said on the analyst call.

Hollywood industry groups, including the Directors Guild of America and theater-chain trade group Cinema United, have also come out in expressing fears that Netflix’s takeover of Warner Bros. will harm the movie theater biz.

Netflix, in its announcement, asserted that the deal will result in “a stronger entertainment industry.” Per the company, “This acquisition will enhance Netflix’s studio capabilities, allowing the company to significantly expand U.S. production capacity and continue to grow investment in original content over the long term which will create jobs and strengthen the entertainment industry.”

The streamer also claimed that a combined Netflix-WB will provide “more opportunities for the creative community,” saying in a statement, “By uniting Netflix’s member experience and global reach with Warner Bros.’ renowned franchises and extensive library, the company will create greater value for talent — offering more opportunities to work with beloved intellectual property, tell new stories and connect with a wider audience than ever before.”

“Our mission has always been to entertain the world,” Sarandos said in a statement. “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. Together, we can give audiences more of what they love and help define the next century of storytelling.”

Greg Peters, co-CEO of Netflix, added: “Warner Bros. has helped define entertainment for more than a century and continues to do so with phenomenal creative executives and production capabilities. With our global reach and proven business model, we can introduce a broader audience to the worlds they create — giving our members more options, attracting more fans to our best-in-class streaming service, strengthening the entire entertainment industry and creating more value for shareholders.”

WBD’s Zaslav said in a statement, “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. For more than a century, Warner Bros. has thrilled audiences, captured the world’s attention, and shaped our culture. By coming together with Netflix, we will ensure people everywhere will continue to enjoy the world’s most resonant stories for generations to come.”

In June 2025, WBD announced plans to separate its streaming and studios business (under the Warner Bros. banner) and its TV networks group (as Discovery Global) into two separate publicly traded companies. This separation is now expected to be completed in third quarter 2026, prior to the closing of the Netflix transaction. The newly separated Discovery Global, headed by current WBD CFO Gunnar Wiedenfels, will include comprise properties including CNN, TNT Sports in the U.S., and Discovery; free-to-air channels in Europe; and digital products including Discovery+ and Bleacher Report.

In an ironic twist in Netflix’s deal to buy Warner Bros., the announcement comes almost exactly 15 years after then-Time Warner chief Jeff Bewkes derided Netflix in an interview with the New York Times as akin to “the Albanian army.” Casting doubt on Netflix’s growing clout in the industry at the time, Bewkes said, “It’s a little bit like, is the Albanian army going to take over the world?”