Official: Netflix acquires Warner Bros and HBO Max for $82.7 billion

The two parties have just confirmed the deal in a joint announcement: Netflix is acquiring Warner Bros and HBO, including streaming service HBO Max, for $82.7 billion dollars.

Rumors have been swirling since yesterday, but now it is official:

- "Our mission has always been to entertain the world," said Ted Sarandos, co-CEO of Netflix. "By combining Warner Bros.’ incredible library of shows and movies—from timeless classics like Casablanca and Citizen Kane to modern favorites like Harry Potter and Friends—with our culture-defining titles like Stranger Things, KPop Demon Hunters and Squid Game, we'll be able to do that even better. Together, we can give audiences more of what they love and help define the next century of storytelling."

- "Today’s announcement combines two of the greatest storytelling companies in the world to bring to even more people the entertainment they love to watch the most," said David Zaslav, President and CEO of Warner Bros Discovery. "For more than a century, Warner Bros. has thrilled audiences, captured the world’s attention, and shaped our culture. By coming together with Netflix, we will ensure people everywhere will continue to enjoy the world’s most resonant stories for generations to come."


Promises more choice, strengthened industry
Netflix promised that customers will get more choice and better value, while the deal also strengthens the entertainment industry as a whole.

Netflix presented the following points:
Complementary strengths and assets: Warner Bros.’ studios are world-class, with Warner Bros. recognized as a leading supplier of television titles and filmed entertainment. HBO and HBO Max also provide a compelling, complementary offering for consumers. Netflix expects to maintain Warner Bros.’ current operations and build on its strengths, including theatrical releases for films.
More choice and greater value for consumers: By adding the deep film and TV libraries and HBO and HBO Max programming, Netflix members will have even more high-quality titles from which to choose. This also allows Netflix to optimize its plans for consumers, enhancing viewing options and expanding access to content.  
A stronger entertainment industry: This acquisition will enhance Netflix’s studio capabilities, allowing the Company to significantly expand U.S. production capacity and continue to grow investment in original content over the long term which will create jobs and strengthen the entertainment industry. 
More opportunities for the creative community: By uniting Netflix’s member experience and global reach with Warner Bros.’ renowned franchises and extensive library, the Company will create greater value for talent—offering more opportunities to work with beloved intellectual property, tell new stories and connect with a wider audience than ever before.
More value for shareholders: By offering members a wider selection of quality series and films, Netflix expects to attract and retain more members, drive more engagement and generate incremental revenue and operating income. The Company also expects to realize at least $2-3 billion of cost savings per year by the third year and expects the transaction to be accretive to GAAP earnings per share by year two.

Purchase price is $82.7 billion
The companies confirmed a purchase price of $82.7 billion dollars. This values WBD at $27.75 dollars per share, of which shareholders will receive 23.25 dollars in cash and 4.5 dollars in Netflix stock for each WBD share they own.

Included in the deal are Warner franchises such as Harry Potter, Lord of the Rings, Dune and Batman as well as HBO franchises like Game of Thrones, House of the Dragon, The Last of Us, The Sopranos, Friends and The White Lotus.

Specifically, Netflix is buying the film studio Warner Bros and related studios, series studio HBO and streaming service HBO Max. It is stated that Warner's current operations will be maintained, but the duration was not disclosed. At present, details are unknown, so we must wait for further information regarding plans for theatrical films, UHD Blu-ray releases, HBO Max, etc.

WBD's TV channels, such as Discovery and CNN, as well as the streaming service Discovery+, are not included in the deal. Warner commits to selling them separately to another party before Netflix takes over.

The deal is expected to close in 12–18 months, subject to approval by shareholders and antitrust authorities.

Disney acquired 21st Century Fox in March 2019 in a deal worth $71 billion dollars, and Amazon purchased the film studio MGM in 2021 for $8.56 billion dollars. This follows the major changes streaming has brought to the entertainment industry.