Netflix seals deal to buy Warner Bros film

Netflix has officially agreed to acquire the film and streaming arms of Warner Bros. Discovery in a major $72 billion (£54 billion) takeover.

The agreement, which includes both cash and stock, values Warner Bros at a total enterprise value of about $82.7 billion, offering $27.75 per share to its shareholders.

The streaming powerhouse beat strong competition from Comcast and a joint Paramount-Skydance push after months of intense acquisition battles.

Warner Bros. Discovery owns some of the world’s most successful film and TV franchises including Harry Potter, Game of Thrones and major DC titles, as well as the premium streaming service HBO Max.

Netflix Co-CEO Ted Sarandos said combining the rich Warner Bros library with Netflix’s massive global streaming reach would “give audiences more of what they love and help define the next century of storytelling.”

His fellow Co-CEO Greg Peters added that the merger would introduce Warner Bros shows and films to a wider global audience than ever before.

David Zaslav, President and CEO of Warner Bros Discovery, described the move as a union of giants:

“By coming together with Netflix, we will ensure people everywhere will continue to enjoy the world’s most resonant stories for generations to come.”

Before the sale process, Paramount made an early bid aimed at acquiring the entire Warner Bros Discovery business, including its cable networks such as CNN, but that move was rejected. Warner later decided to open itself up for sale.

Analysts warn that regulators in the United States may challenge such a massive consolidation of media power. Emma Wall, chief investment strategist at Hargreaves Lansdown, noted:

“This will create a global mega power in broadcast entertainment which the regulator will want to look at.”

Tom Harrington, Head of TV at Enders Analysis, said the takeover could have a huge impact on traditional cinema and Hollywood operations:

“Were it to go through, it would reorient Hollywood, with a streamer acquiring a business much of which it is existentially the antithesis of. Netflix has always had some limited use for cinema but generally its offering undermines it.”

Harrington also warned of major cuts in film and television output and resistance from unions and industry stakeholders, and said HBO  regarded as the “creative jewel”, may be at risk under Netflix ownership despite surviving tough ownership changes before.

Consumers might also feel the effects, Harrington cautioned. With Netflix likely to raise prices after gaining more premium content and HBO Max expected to be phased out households could ultimately spend more on streaming subscriptions.

The deal now awaits regulatory review. If cleared, the merger will create the largest media streaming empire in the world