Netflix Wins Bidding War, Announces Deal to Acquire Warner Bros.

Netflix on Friday announced plans to acquire Warner Bros. Discovery’s (WBD) studio and streaming divisions, emerging as the winner in a high-profile bidding war. The streaming giant has agreed to purchase WBD’s TV and movie studio along with key assets such as HBO Max for $72 billion in equity, plus debt, giving the deal a total enterprise value of approximately $82.7 billion. The transaction, which combines cash and stock, values WBD shares at $27.75 each, the companies said.

The acquisition will take effect after WBD completes its planned 2026 split into two publicly traded entities. Netflix will acquire the newly independent Warner Bros. half, which includes the iconic TV and movie business itself along with its streaming operations, while the remaining Discovery Global company will retain WBD’s cable assets, including CNN, Discovery, and other cable channels.

For weeks, Paramount had been considered the leading contender in the auction, with executives seeking to acquire all of WBD, including its cable operations. WBD began exploring a sale in October 2025 after being approached by Paramount on three prior occasions. Comcast also expressed interest, submitting multiple bids specifically for WBD’s studio and streaming assets during the bidding process.

Speaking on an investor call Friday, Netflix Co-CEO Ted Sarandos acknowledged the surprise some may feel at the acquisition.

“Over the years, we have been known to be builders, not buyers,” Sarandos said. “We already have incredible shows and movies and a great business model, and it’s working for talent, it’s working for consumers and it’s working for shareholders. This is a rare opportunity. It’s going to help us achieve our mission to entertain the world and to bring people together through great stories.”

Paramount has pushed back against how the sale has been handled. In a letter to WBD, the company’s legal team argued that the process is biased, claiming WBD has “abandoned the semblance and reality of a fair transaction process” and suggesting that management was favoring Netflix’s offer over others.

Paramount had already raised its concerns about other suitors acquiring WBD in a previous letter, arguing it is the only bidder with a realistic chance of clearing regulatory review. The company claimed that proposals from Netflix and Comcast “present serious issues that no regulator will be able to ignore” and argued that “the simple truth is that a deal with Netflix as the buyer likely will never close.” Paramount maintained that it is the only suitor with “a clear path to closing based upon decades of legal precedent.”

Paramount, now owned by David Ellison’s Skydance, is widely seen as having a favorable relationship with President Trump and the current White House, giving it an edge in securing regulatory approval. Trump has frequently praised David Ellison and his father, Larry Ellison, the executive chairman of Oracle.

As part of the deal, Netflix has agreed to pay a $5.8 billion reverse breakup fee if the deal fails to gain approval. On the other hand, Warner Bros. Discovery would be required to pay a $2.8 billion breakup fee if it opts to abandon the deal in favor of another merger.

Netflix’s bid has faced scrutiny from industry analysts who warn that the company’s focus on streaming could pose a threat to the broader film industry and movie theaters. On Friday, Netflix responded by stating that it “expects to maintain Warner Bros.’ current operations and build on its strengths, including theatrical releases for films.” While Netflix has pledged to continue releasing movies in theaters, it has criticized the lengthy theatrical windows. “My pushback has been mostly on the long exclusive windows, which we don’t really think are that consumer friendly,” Sarandos explained.

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