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In a move shaking the bedrock of global entertainment, Netflix said Friday it reached an agreement to acquire Warner Bros. Discovery’s studio and streaming empire in a sweeping cash-and-stock transaction valuing the assets at $82.7 billion, debt included. The deal lands with the force of a Hollywood plot twist—one where legacy icons meet the titan of streaming under a single banner.

Skadden Arps Slate Meagher & Flom LLP steered Netflix through the negotiations, while Wachtell Lipton Rosen & Katz and Debevoise & Plimpton LLP advised WBD.

A Deal That Reorders the Entertainment Universe

Under the agreement, Netflix will absorb Warner Bros.’ film and television studios, HBO and HBO Max, pulling legendary franchises into its expanding orbit. WBD shareholders will receive $23.25 in cash and $4.50 in Netflix stock per share, valuing the company at $27.75 per share, according to the announcement. The equity value alone clocks in at $72 billion.

Closing is expected in 12 to 18 months, contingent on WBD completing its plan to spin off its Global Networks division—home to CNN, TNT Sports, Discovery and numerous international channels.

A Library That Spans Eras and Universes

With this union, Netflix acquires the rarest of cinematic treasure chests: classics like Casablanca and The Wizard of Oz, global sensations like Game of Thrones, the DC universe, and the Harry Potter franchise. They will now sit beside Netflix’s own pillars, including Stranger Things, Bridgerton, and Money Heist, forging a catalog that stretches from golden-age reels to streaming-age juggernauts.

Netflix expects the merger to boost membership and engagement while generating $2 billion to $3 billion in annual cost savings by the third year after closing. The company projects the deal will become accretive to earnings by year two.

Leaders Cast the Vision

“Our mission has always been to entertain the world,” Netflix co-CEO Ted Sarandos said, framing the acquisition as an expansion of that ambition. “Together, we can give audiences more of what they love and help define the next century of storytelling.”

Co-CEO Greg Peters echoed the sentiment, emphasizing that the transaction would broaden the company’s production reach and “accelerate our business for decades to come.”

Netflix added that it will keep Warner Bros.’ operations intact and reinforce its strongest assets, including theatrical film releases.

WBD CEO David Zaslav called the combination a guarantee that “people everywhere will continue to enjoy the world’s most resonant stories for generations to come.”

A Complex Financial Structure

Shareholders of WBD will receive Netflix stock valued at $4.50 if the streaming giant’s 15-day VWAP lands between $97.91 and $119.67 before closing. Outside that window, the exchange ratio becomes fixed at 0.0460 or 0.0376 Netflix shares.

Boards at both companies have cleared the transaction, which still awaits regulatory scrutiny, WBD shareholder approval and the completion of the Discovery Global spinoff.

The New Apex Predator of Streaming

Netflix, already the largest paid streaming platform with more than 300 million subscribers, stands to gain unmatched scale through the addition of Warner Bros.’ studios and content libraries. Analysts say the consolidation could bolster Netflix’s negotiating power with cinema chains and Hollywood unions.

If finalized, the acquisition ends a bidding battle that reportedly attracted interest from Comcast and Paramount, positioning Netflix as the victor in one of the most significant entertainment deals of the century.

Behind the Deal

The Skadden team includes partners Kenton King, Sonia Nijjar, Lauren Kramer, Steven Sunshine, Joseph Rancour, Ken Kumayama, Michelle Gasaway, Leila Sayegh, Nathan Giesselman, Page Griffin and Ryne Posey.

Wachtell’s team is led by partners Andrew J. Nussbaum, Karessa L. Cain, and associate Hannah Clark, joined by partners Deborah L. Paul, William Savitt and Ryan A. McLeod.

Details on Debevoise’s deal team were not immediately available.