Netflix has fired the biggest shot yet in the streaming wars, striking an $82.7 billion deal to acquire Warner Bros, the home of DC, Game of Thrones and The Wizard of Oz. Once the separation of Discovery Global completes next year, the world’s largest streaming service will swallow one of Hollywood’s most storied studios whole.
The cash and stock takeover values Warner Bros Discovery at $27.75 a share and hands Netflix a century old catalogue of cultural gold, from Casablanca and Citizen Kane to Harry Potter and Friends, to bolster global hits including Stranger Things, Money Heist and Bridgerton.
Netflix co chief executive Ted Sarandos promised an entertainment superpower capable of redefining the next century of storytelling. “Together, we can give audiences more of what they love,” he said.
Greg Peters, his fellow co chief, said the deal would supercharge Netflix’s creative engine, expand production muscle and widen global reach. Warner Bros, he added, comes with “phenomenal executives and capabilities” Netflix plans to scale further.
Warner Bros Discovery chief executive David Zaslav framed the move as a cultural safeguard. The tie up, he said, ensures Warner Bros’ greatest stories will thrill audiences “for generations to come.”
Netflix intends to keep Warner’s theatrical pipeline alive while folding HBO and HBO Max’s premium offering into a beefed up streaming proposition. Subscribers can expect more choice and fewer excuses to ever leave the sofa.
The combined group is targeting $2 billion to $3 billion in annual cost savings within three years. Shareholders are told to brace for accretive earnings as early as year two.
First, though, the corporate surgery. WBD must spin off its global networks arm, Discovery Global, into a separately listed company, housing brands such as CNN, TNT Sports, Discovery and the streaming service Discovery+, before regulatory approvals sign off. The transaction is expected to close in 12 to 18 months.
Hollywood’s tectonic plates are shifting fast. Netflix has not just acquired a studio, it has absorbed a legacy. The credits may not have rolled yet, but the sequel to streaming’s biggest battle just got a lot more interesting.
