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Netflix has agreed to acquire the film and streaming businesses of Warner Bros Discovery in a landmark $72bn (£54bn) deal, reshaping the global entertainment industry in one of the biggest media takeovers in Hollywood history.

The streaming giant beat off competition from Comcast and Paramount Skydance after a protracted bidding battle to secure Warner Bros, home to iconic franchises including Harry Potter and Game of Thrones, as well as the HBO Max streaming service. The acquisition, however, will still require clearance from competition regulators.

Netflix co-chief executive Ted Sarandos said the company was “highly confident” of securing regulatory approval and was moving “full speed” towards completing the deal. By joining forces, he said, the combined businesses could usher in a new era of storytelling. “By combining the library of Warner Bros shows and movies with our own series such as Stranger Things, we can give audiences more of what they love and help define the next century of storytelling,” Sarandos said.

HBO Brand to Remain Key as Integration Plans Take Shape

Asked whether HBO would continue as a separate streaming brand, Netflix co-chief executive Greg Peters said the company recognised its value for viewers. “We believe the HBO brand is important for consumers, but it is quite early to get into the specifics of how we are going to tailor this offering,” he said.

Netflix estimates the merger will deliver between $2bn and $3bn in savings, largely through removing overlaps in support and technology functions. Warner Bros films will continue to be released in cinemas, while its television studio will still be able to produce content for third parties. Netflix, meanwhile, will continue to create programming exclusively for its own platform.

Calling it a “big day” for both companies, Sarandos acknowledged the scale of the move may have caught some investors by surprise. He described the acquisition as a “rare opportunity” that positions Netflix for success “for decades to come”.

$27.75 Per Share Deal Approved by Both Boards

Warner Bros president and chief executive David Zaslav said the agreement would unite “two of the greatest storytelling companies in the world”. “By coming together with Netflix, we will ensure people everywhere continue to enjoy the world’s most resonant stories for generations to come,” he said.

Under the terms of the cash-and-stock deal, Warner Bros shareholders will receive $27.75 per share. The total enterprise value of the transaction, including debt, stands at about $82.7bn, while the equity value is $72bn. Both companies said their boards had unanimously approved the agreement.

The takeover is also expected to significantly expand Netflix’s studio production capacity and accelerate its investment in original programming. The transaction will be completed after Warner Bros finalises its previously announced plan to split its streaming and studios division from its global networks arm into two separately listed companies next year.

Warner Bros’ global networks division includes major cable channels such as CNN, along with its sports brands and free-to-air television networks across Europe, which will remain outside the Netflix deal.