Netflix Acquires Warner Bros. Discovery in $72 Billion Deal

Netflix has finalized a significant acquisition of Warner Bros. Discovery, the entertainment powerhouse known for iconic properties like “Harry Potter” and HBO Max. The deal, valued at **$72 billion USD**, marks a monumental shift in the entertainment landscape and could reshape the future of streaming services.

If approved by regulatory authorities, the merger will combine two of the largest players in film and television under one umbrella. This would integrate Warner’s extensive television and motion picture divisions, including **DC Studios**, with Netflix’s extensive library and production capabilities, known for hits like “Stranger Things” and “Squid Game.”

David Zaslav, CEO of Warner Bros. Discovery, expressed optimism about the merger, stating, “For more than a century, Warner Bros. has thrilled audiences… By coming together with Netflix, we will ensure people everywhere will continue to enjoy the world’s most resonant stories for generations to come.”

The acquisition, which values Warner shares at **$27.75**, brings the total enterprise value to **$82.7 billion**, including debt. The transaction is anticipated to close within **12 to 18 months** following Warner’s separation from its cable operations, which will exclude networks such as CNN and Discovery.

Regulatory Challenges and Market Reactions

As the merger progresses, it is likely to face rigorous scrutiny from regulatory bodies, particularly concerning its impact on streaming subscriptions. Mike Proulx, vice president and research director at Forrester, commented on the implications, stating, “Netflix is the top streaming service today. Now combined with HBO Max, it will absolutely cement itself as the Goliath in the streaming industry.”

A pressing question surrounds whether HBO Max and Netflix will function as separate services or merge into a single platform. Proulx suggests that a combined entity could lead to price relief for customers, offering bundled promotions amidst rising subscription costs.

Netflix has maintained that incorporating HBO and HBO Max programming will enhance its offerings. “Our mission has always been to entertain the world,” said Ted Sarandos, co-CEO of Netflix. He added that the merger would allow the company to provide audiences with “more of what they love.”

Critics, however, warn of adverse consequences for moviegoers and the broader theater industry. Cinema United, a trade association representing over **30,000 movie screens** in the U.S. and **26,000 screens** internationally, has voiced opposition to the merger. CEO Michael O’Leary stated, “Theatres will close, communities will suffer, jobs will be lost,” urging regulators to carefully consider the merger’s potential impacts.

Strategic Implications for Netflix and Warner Bros.

This acquisition signifies a strategic shift for Netflix, particularly in its approach to theatrical releases. The streaming giant has pledged to uphold theatrical releases for Warner’s films, honoring existing contracts. Historically, Netflix has limited its original content to its online platform but has made exceptions for award contenders, such as this year’s “Frankenstein” and limited screenings for “KPop Demon Hunters.”

Despite Netflix’s reluctance to disclose ticket sales, “KPop Demon Hunters” reportedly topped the box office with nearly **$20 million USD** in late August. This suggests the potential for more significant theatrical engagement under the new combined entity.

The merger’s announcement follows a protracted bidding war for Warner Bros. Discovery, with interest from various competitors, including **Paramount** and **Comcast**. Paramount had previously positioned itself as a frontrunner, aiming to acquire Warner’s entire business, including its cable assets.

As the situation evolves, analysts anticipate that political dynamics may also influence the merger’s fate. “No doubt politics are going to come into play,” Proulx remarked, hinting at the complexities surrounding the acquisition process.

In the meantime, Warner Bros. is in the midst of separating its streaming and studio operations from its cable business, with plans to create a new publicly traded company, “Discovery Global,” expected to finalize in the third quarter of **2026**.

Following the announcement, shares of Warner Bros. rose nearly **2%**, while Netflix’s shares fell by nearly **2%**. Paramount’s shares experienced a decline of almost **6%**.

As the entertainment industry watches closely, the outcome of this merger could have profound implications for consumers, content creators, and the future of streaming.