Los Angeles: Netflix has emerged victorious in the bidding war for Warner Bros. and HBO, securing a deal that could merge one of the world's leading streaming platforms with one of the largest traditional film and television studios.
The deal has a total enterprise value (including debt) of approximately USD 82.7 billion, with an equity value of USD 72 billion, the companies said, as per Variety.
The announcement of Netflix's deal to buy the Warner Bros. streaming and studios business came after a weeks-long bidding war that pitted the streaming giant against David Ellison's Paramount Skydance and Comcast.
"I know some of you are surprised we are making this acquisition," Netflix co-CEO Ted Sarandos said on a call with analysts Friday, noting the company historically has been more "builders" than "buyers." Netflix said it expects "to maintain Warner Bros.' current operations and build on its strengths," including theatrical releases. Currently, Warner Bros. has deals to release its films in cinemas through 2029. In the near term, Netflix signalled it would keep HBO Max as a separate service, while also touting the addition of HBO and HBO Max content to its lineup.
"By adding the deep film and TV libraries and HBO and HBO Max programming, Netflix members will have even more high-quality titles from which to choose," the company said. "This also allows Netflix to optimise its plans for consumers, enhancing viewing options and expanding access to content." Netflix said it expects to see USD 2 billion to USD 3 billion in annual cost savings by the third year after the WB deal closes. The company expects the transaction to be accretive to earnings per share by year two.
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