Netflix buys Warner Bros Discovery for $83 billion

Details of the acquisition

Total amount of the transaction : 83 billion dollars

• Price per share : 27.75 dollars
• Adding value to the company : 72 billion (excluding debt)
• Objective of the WBD Board of Directors: approximately $75 billion (excluding debt)

What Netflix is acquiring

Catalogue of films and series :

• Timeless classics: “Casablanca”, “Citizen Kane”.”
• Modern franchises: “Harry Potter”, “Friends”
• Huge library of Warner Bros content

Streaming services :

• HBO Max, the prestigious streaming service

Explanation of the implications in video

Background to the operation

Historical importance :

• Largest entertainment consolidation since Disney's takeover of Fox ($71 billion in 2019)

Competition :

• Paramount Skydance and Comcast were also in the running.
• Netflix offered the highest bid

Timetable and reorganisation

Strategic separation from WBD :

• In June, WBD announced that it wanted to separate its streaming and studios divisions into two separate listed companies
• This separation should be completed in the third quarter of 2026.
• The transaction will be finalised after this separation.

Management reaction

Ted Sarandos, CEO of Netflix:
“By combining Warner Bros‘ incredible library of series and films with our culture-defining titles such as ’Stranger Things‘, ’KPop‘, ’Demon Hunters‘ and ’Squid Game”, we'll be able to entertain even better."

Market context

Battle of the streaming :

• The decline in traditional television is forcing players to reorganise
• Netflix and Disney's competitors are looking to join forces to strengthen their position
• Objective: improve profitability in streaming

Regulatory concerns

Concerns from the White House :

• According to the “New York Post”, officials recently expressed concern about the acquisition.
• Potential risk: Netflix's dominant position in the US content market

Reaction of the financial markets

On Friday, before the opening of the New York Stock Exchange (around 12:30 GMT):

• Netflix share price down 2.61TP3Q
• Warner Bros shares: up 1.21TP3Q