Netflix to Buy Warner Bros. for $83 Billion After Split. How the Stocks Are Reacting.

Netflix could add properties like Harry Potter to its portfolio with an acquisition of Warner Bros. Discovery. (Mario Tama/Getty Images)

Key Points

• Netflix agreed to acquire Warner Bros. Discovery for an enterprise value of $82.7 billion, valuing the company at $27.75 per share.
• The acquisition follows Warner’s planned spinoff of its global cable network operations, which Netflix did not bid on.
• Paramount Skydance accused Warner of favoring Netflix, alleging a predetermined outcome in the bidding process.

Netflix has agreed to buy Warner Bros. Discovery in a nearly-$83 billion deal, following the planned spinoff of Warner’s global cable network operations.

The deal values Warner Bros. Discovery at $27.75 a share, implying a total equity value of approximately $72 billion and an enterprise value of around $82.7 billion.

Netflix shares were down 2.6% in premarket trading, while Warner shares were rising 0.2% to $24.59.

The deal is set to be by far Netflix’s biggest-ever acquisition and will bring it control of rights to beloved characters including Batman and Harry Potter. However, there may be antitrust concerns amid concerns that it could hand the streamer too much power over Hollywood.

Shares of rival entertainment were falling early Friday with Roku down 2.3% and Cinemark down 2.4% in the premarket.

Netflix looks to already be preparing its arguments, saying in a statement that the acquisition would allow it to significantly expand U.S. production capacity and increase investment in original content.

“With our global reach and proven business model, we can introduce a broader audience to the worlds they create—giving our members more options, attracting more fans to our best-in-class streaming service, strengthening the entire entertainment industry and creating more value for shareholders,” said Netflix co-CEO Greg Peters in a statement.

The deal has angered Paramount Skydance, which has accused Warner of favoring its rival bidder.

Paramount wrote in a Wednesday letter to Warner Discovery Chief Executive David Zaslav that the company has “embarked on a myopic process with a predetermined outcome that favors a single bidder,” which it believes to be Netflix, the WSJ reported.

Warner, Netflix and Paramount didn’t immediately respond to requests for comments from Barron’s early on Friday.

Warner is currently moving ahead with plans to separate into two companies, one comprising the studio and streaming assets and the other containing its global cable network operations. Paramount sought to buy the whole company, while Comcast and Netflix have presented offers for the streaming and studios segment, not the cable channels.

Netflix’s deal for Warner is expected to close after the separation of the cable division, named Discovery Global, into a new publicly-traded company, expected in the third quarter of 2026.

Write to Adam Clark at adam.clark@barrons.com