Netflix to buy Warner Bros. in $72 billion deal that includes HBO Network

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 cable channels including CNN, TBS and TNT.
The acquisition marks an 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.
Warner Bros. put itself up for sale in October after receiving interest from several parties. In addition to Netflix, it was pursued by Paramount Skydance Corp. and Comcast Corp. The bidding got contentious, with Paramount accusing Warner Bros. of operating an unfair process that favoured Netflix.
The traditional TV business is in the midst of a major contraction as viewers shift to streaming, the world that Netflix dominates. In the most recent quarter, Warner Bros. Cable TV networks division reported a 23% decline in revenue, as customers canceled their subscriptions and advertisers moved elsewhere.
Founded almost three decades ago as a DVD rental company sending discs to customers by mail, Netflix finished 2024 with $39 billion in revenue. Warner Bros., founded in the 1920s, had more than $39 billion in sales.
California Republican Darrell Issa wrote a note to US regulators objecting to any potential Netflix-Warner Bros deal, saying that it could result in harm to consumers. Netflix has argued that one of its biggest competitors, however, is Alphabet Inc.’s YouTube.
Netflix’s interest in Warner Bros. also sent shivers through Hollywood. The company has largely refused to release films in theaters, occasionally giving its original movies limited runs in cinemas.