Netflix Agrees to Buy Warner Bros. Studios and HBO Max in $72 Billion Deal

Netflix said on Friday it will acquire the film and television studios and the HBO Max streaming service of Warner Bros. Discovery, ending a weeks-long bidding contest with Paramount Skydance. CNBC, in a report carried by Australian outlets, said the deal values Warner’s equity at about $72 billion and the business at about $82.7 billion including debt. NBC News reported the figure as nearly $83 billion.

Warner shareholders are to receive $27.75 per share, made up of $23.25 in cash and $4.50 in Netflix stock, according to CNBC’s report. Warner’s cable networks, including CNN and TNT, are not part of the deal; Warner will proceed with its planned spin-off of those channels into a separate company, Discovery Global, CNBC reported, with the separation now expected in the third quarter of 2026. Closing is expected 12 to 18 months out, after that separation. Both companies’ boards approved the deal unanimously, and it still needs regulatory approval and a Warner shareholder vote.

The agreement includes steep penalties if it falls apart. Netflix owes a $5.8 billion reverse breakup fee if regulators do not approve the deal, and Warner owes $2.8 billion if it walks away to pursue a different merger, CNBC said. Netflix co-CEO Ted Sarandos said the company has been known as “builders, not buyers,” and called the deal “a rare opportunity.”

The scale of the combination has already drawn scrutiny. Netflix reported more than 300 million global streaming subscribers at the end of 2024, and Warner reported 128 million as of Sept. 30, CNBC said. The report noted that the merger could draw regulatory scrutiny because of the size of both streaming businesses. Reuters, cited by the Khaleej Times, reported that bipartisan lawmakers and Hollywood unions criticized the transaction over possible job cuts and higher consumer prices.

Paramount, a rival bidder, had offered $30 per share in cash, with a $5 billion breakup fee if the deal failed regulatory approval after about 10 months, per CNBC. Paramount questioned the fairness of the sale process, arguing that Warner favored Netflix, and raised antitrust concerns in a letter to Warner’s management. Comcast was also among the bidders, according to the reports.

Warner’s board had already approved the Netflix agreement, NBC News reported, which left Paramount with the option of taking a bid directly to shareholders. It did exactly that the following Monday (later source), launching a hostile $30-a-share cash offer valued at more than $108 billion for the entire company, including the cable networks, according to NBC News. President Donald Trump said on Dec. 7 the Netflix deal could be an antitrust “problem” and that he would “be involved” in the approval process, NBC News said.

For the entertainment business, the deal would put one of the largest streaming services together with Hollywood’s oldest studio and the HBO library, and would leave the future of Warner’s news and cable channels in a separate company.