Netflix to Buy Warner Bros. for $83 Billion

Netflix said Friday that it has entered an agreement to buy Warner Bros. and HBO and HBO Max for $83 billion. The transaction is expected to close after the previously announced separation of WBD’s Global Networks division, Discovery Global, into a new public company set to be completed in the third quarter of 2023.

“Our mission has always been to entertain the world,” Ted Sarandos, co-CEO of Netflix, said in a statement Friday. “By combining Warner Bros.’ incredible library of shows and movies—from timeless classics like Casablancaand Citizen Kaneto 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.”

Netflix’s bid ended up being in cash and stock, valued at $27.75 per WBD share, well above other reported offers from rival bidders like Paramount, which had submitted at least three bids to win all of Warner Bros. Discovery. The Netflix offer represents a 122% premium over where WBD stock was trading in mid-September when it was first reported that Paramount was interested in buying the company.

“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.”

Zaslav had come under fire for most of his tenure at WBD after the 2o22 merger of Discovery and WarnerMedia failed to deliver the results that was Wall Street was anticipating.

Under the Netflix offer, each WBD shareholder will receive $23.25 in cash and $4.50 in shares of Netflix common stock for each share of WBD common stock outstanding at the closing of the transaction.

The transaction values Warner Bros. Discovery at $27.75 per share that translates to total equity value of about $72 billion and an enterprise value of approximately $82.7 billion. Netflix shares were trading down about 2% in pre-market trading on Friday to $100.87.

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