Netflix announced on Friday a $72 billion agreement to acquire Warner Bros. Discovery's television and film studios along with its streaming division.
The cash-and-stock transaction values the assets at $27.75 per share and represents a 121.3% premium over Warner Bros. Discovery's share price before initial sale reports emerged in September.
The deal excludes Warner Bros. Discovery's cable networks, which will spin off into a separate company called Discovery Global expected to list publicly in the third quarter of 2026.
Under the terms, Warner Bros. Discovery shareholders will receive $23.25 in cash and approximately $4.50 in Netflix stock per share.
Netflix expects annual cost savings of $2 billion to $3 billion by the third year following closure and plans to maintain theatrical releases for Warner studio films.
The acquisition provides Netflix with franchises including Harry Potter, Game of Thrones, and DC Comics superheroes, while combining Netflix's service with HBO Max's nearly 130 million subscribers.
Co-CEO Ted Sarandos described the move as a rare opportunity to advance Netflix's mission despite the company's historical focus on building rather than buying assets.
The transaction faces likely intense regulatory scrutiny in the United States and Europe due to the combined entity's dominance in streaming.
Critics, including theater association Cinema United, warn the deal threatens global movie exhibition and could reduce competition in Hollywood.
Paramount Skydance, which pursued the entire company, and Comcast also participated in the bidding process that concluded with Netflix's winning offer.
Netflix argues the combination will expand content choices for subscribers and potentially lower costs through bundled offerings.