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Wall Street Surprised by Netflix Deal to Buy Warner Bros. Discovery
Jason Bazinet, Managing Director at Citigroup, discusses Netflix's move to buy Warner Bros. Discovery in a historic combination.
Netflix Inc. agreed to buy Warner Bros. Discovery Inc. in a historic combination, joining the world’s dominant paid streaming service with one of Hollywood’s oldest and most revered studios.
Under the deal announced Friday, Warner Bros. shareholders will receive $27.75 a share in cash and stock in Netflix. The total equity value of the deal is $72 billion, while the enterprise value of the deal is about $82.7 billion.
Prior to the closing of the sale, Warner Bros. will complete the planned spinoff of its networks division, which includes cable channels such as CNN, TBS and TNT. That transaction is now expected to be completed in the third quarter of 2026, Netflix said in a statement.
Netflix shares were down 2.3% in premarket trading in New York. Warner Bros. stock was up about 1%.
The acquisition marks a dramatic strategic shift for Netflix, which has never made a deal of this scope. The streaming pioneer grew to become Hollywood’s most valuable company, without the benefit of a library or studio, by licensing programs from others and then expanding into original content.
With the purchase, Netflix becomes owner of the HBO network, along with its library of hit shows like The Sopranos and The White Lotus. Warner Bros. assets also include its sprawling studios in Burbank, California, along with a vast film and TV archive that includes Harry Potter and Friends.
“Together, we can give audiences more of what they love and help define the next century of storytelling,” Netflix co-Chief Executive Officer Ted Sarandos said in the statement.
Netflix said it expects to maintain Warner Bros.’ current operations and build on its strengths, including theatrical releases for films, a point that had been a cause of concern in Hollywood. Netflix said the deal will allow it to “significantly expand” US production capacity and invest in original content, which will create jobs and strengthen the entertainment industry.
Still, the combination is also expected to create “at least $2 billion to $3 billion” in cost savings per year by the third year, according to the statement.
Warner Bros. put itself up for sale in October after receiving interest from several parties. In addition to Netflix, the company was pursued by Paramount Skydance Corp. and Comcast Corp. Warner Bros. entered into exclusive deal talks with Netflix on Thursday, Blooomberg reported.
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Published Dec 5, 2025
