(BBC News) Netflix has agreed to buy the film and streaming businesses of Warner Bros Discovery for $72 billion in a major Hollywood deal.
The streaming giant emerged as the successful bidder for Warner Bros ahead of rivals Comcast and Paramount Skydance after a drawn-out battle.
Warner Bros owns franchises including Harry Potter and Game of Thrones, and the streaming service HBO Max.
The deal will still have to be approved by competition authorities.
Netflix co-chief executive Ted Sarandos said the streamer was “highly confident” it would receive the regulatory approval it needs and it was running “full speed” toward this.
He said that by combining the library of Warner Bros shows and movies with the streaming platform’s series such as Stranger Things, “we can give audiences more of what they love and help define the next century of storytelling.”
“Warner Bros have defined the last century of entertainment, and together we can define the next one,” he said.
Asked whether HBO should remain a separate streaming service, co-chief executive Greg Peters said Netflix believed the HBO brand was important for consumers, but added: “We think it’s quite early to get into the specifics of how we are going to tailor this offering for consumers.”
Netflix estimates it will find $2 billion to $3 billion in savings, mostly through eliminating overlaps in the support and technology areas of the businesses.
Films made by Warner Bros will continue to be launched in cinemas, it said, and Warner Bros television studio will continue to be able to produce for third parties. Netflix will keep producing content exclusively for its own platform.
Labelling it a “big day” for the companies, Sarandos acknowledged the acquisition may have surprised some shareholders, but it was a “rare opportunity” to set Netflix up for success “for decades to come”.
David Zaslav, president and chief executive of Warner Bros, added the agreement would combine “two of the greatest storytelling companies in the world.”
“By coming together with Netflix, we will ensure people everywhere will continue to enjoy the world’s most resonant stories for generations to come,” he said.
The cash-and-stock deal is worth $27.75 per Warner Bros share, with a total enterprise value – which includes the company’s debts and the value of its shares – of about $82.7 billion. The equity value, or cash price, is $72 billion.
The boards of directors from each company approved the deal unanimously.
