Netflix to buy Warner Bros Discovery’s studios, streaming unit for more than $93b

LOS ANGELES – Netflix has agreed to buy Warner Bros Discovery’s TV and film studios and streaming division for US$72 billion (S$93.3 billion), a deal that would hand control of one of Hollywood’s most prized and oldest assets to the streaming pioneer that has upended the media industry.

The agreement – announced on Dec 5 – follows a weeks-long bidding war. Netflix seized the lead with an offer of nearly US$28 a share that eclipsed Paramount Skydance’s nearly US$24-a-share bid for the whole of Warner Bros Discovery, including the cable TV assets slated for a spin-off.

Warner Bros Discovery shares closed at US$24.5 on Dec 4, giving it a market value of US$61 billion.

Deal set to reshape media landscape

Buying the owner of marquee franchises that include Game Of Thrones, DC Comics and Harry Potter will further tilt the power balance in Hollywood in favour of the streaming giant, which built its dominance without major acquisitions or a large content library.

The acquisition will help Netflix’s efforts to ward off competition from Walt Disney and the Ellison family-backed Paramount.

“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 a statement.

Strong antitrust scrutiny likely

But the deal is likely to face strong antitrust scrutiny in Europe and the US as it would give the world’s biggest streaming service ownership of a rival that is home to HBO Max and boasts nearly 130 million streaming subscribers.

David Ellison-led Paramount, which kicked off the bidding war with a series of unsolicited offers and has close ties with the Trump administration, questioned the sale process earlier this week in a letter alleging favourable treatment to Netflix.

Even before the bids were in, some members of Congress said a Netflix-Warner Bros Discovery deal could harm consumers and Hollywood.

Cinema United, a global exhibition trade association, said on Dec 5 the deal poses an “unprecedented threat” to cinemas worldwide.

PP Foresight analyst Paolo Pescatore said: “In the light of the current regulatory environment, this will raise eyebrows and concerns. The combined dominant streaming player will be heavily scrutinised. We should expect this to wrangle on, given Paramount Skydance’s pursuit for Warner Bros Discovery.”

Looking to allay some concerns, Netflix said the deal would give subscribers more shows and films, boost its US production and long-term spending on original content and create more jobs and opportunities for creative talent.

The company argued in deal talks that a combination of its streaming service with HBO Max would benefit consumers by lowering the cost of a bundled offering.

It has also told Warner Bros Discovery that it would keep releasing the studio’s films in cinemas in a bid to ease fears that its deal would eliminate another studio and major source of theatrical films, according to media reports.

Cash-and-stock deal

Warner Bros Discovery shares were up 2.4 per cent at US$25 in pre-market trading, while Netflix fell nearly 3 per cent and Paramount 2.2 per cent. Comcast, the third suitor, was trading little changed.

Paramount and Comcast did not immediately respond to requests for comment.

Under the deal, each Warner Bros Discovery shareholder will receive US$23.25 in cash and about US$4.50 in Netflix stock per share, valuing Warner at US$27.75 a share, or about US$72 billion in equity and US$82.7 billion, including debt.

The deal represents a premium of 121.3 per cent to Warner Bros Discovery’s closing share price on Sept 10, before initial reports of a possible buyout emerged.

The deal is expected to close after Warner Bros Discovery spins off its global networks unit, Discovery Global, into a separate listed company, a move now set for completion in the third quarter of 2026.

Netflix has offered Warner Bros Discovery a US$5.8 billion break-up fee, while Warner Bros Discovery would pay Netflix US$2.8 billion if the deal collapses.

Netflix said it expects to generate at least US$2 billion to US$3 billion in annual cost savings by the third year after the deal closes.

Netflix growth worries

Analysts have said Netflix is driven by a desire to lock up long-term rights to hit shows and films and rely less on outside studios as it expands into gaming and looks for new avenues of growth after the success of its password-sharing crackdown.

Its shares were up just 16 per cent in 2025, after surging more than 80 per cent in 2024, as investors worry that its breakneck growth could be slowing, especially after it stopped disclosing subscriber figures earlier in 2025.

The company has leaned on its ad-supported tier to drive growth, but that is not expected to become a major revenue engine until 2026, while analysts say its push into video games has stumbled amid strategy shifts and executive turnover.

Buying Warner Bros would also deepen its gaming bet as the company is one of the few entertainment companies to notch big successes in the sector, including its Harry Potter title Hogwarts Legacy, which has generated more than US$1 billion in revenue. REUTERS